22 Aug 2018

Under the Stars

Hail readers!

It has been a long time since I’ve written here on the Magical Realm, for which I can only express my regret. Alas, life has a tendency to catch up on you. Moreover, I’ve had a number of things to keep me occupied and otherwise indisposed.

The first of these was university, especially my second (and last, thankfully) Spanish class, which was a mess of grammar. Then the summer holidays came; school finished, but I spent a long time on the road to Romania, fell sick to an abscess in the gums, and spent much time occupied with these foibles. Then there were tuition fees to be paid, not to mention a microeconomics paper to complete.

After all that, I followed my grandparents to the countryside, where, for a time, I had no Internet. Blogging was therefore out of the question, but I still managed to work on both Fallen Love and its sequel.

Speaking of the books, I will get onto that in a moment. Firstly: I wish to discuss my latest poem, entitled Under the Stars (for which this post is eponymous).

A New Poem

Under the Stars is slightly meta-poetic, in that it refers to a poet, but its main message concerns immortality—the immortality of being remembered, of being important to the universe in a way above and beyond the normally insignificant lives led by humans. (Hence the metaphorical allusion to the stars.)

The poem is also a warning, of sorts: those who never seek to explore the world, to understand some of its mysteries, are no better than lesser animals—the poem compares them to chickens.

I should make a few things clear about this poem is not, however. The poem does not deal with any kind of physical immortality (debatable based on the definition of physical immortality and the laws of entropy). Nor does it comment on non-physical immortality (another can of worms entirely).

With that said, read on!

Under the stars Where the Heavens shine bright
In the dark shadow of the blue night
A poet dreams
The things unknown to man.

The moon dares not show herself
For her time is not yet;
The night belongs to the darkness
To the pale blue, the faint yellow
The unseen magenta hues.

It is said
That to admire those precious points of light
For too long
Leaves mortals mad.
The vast unknown is too great to ponder.

But the poet, nay;
He is no mere mortal, is he not?
For what is immortality
But remembered epics
That live forevermore in the minds of men?

On this dark night
In this bright sky
When others sleep soundly in their beds
(Fools, so little they know!)
The poet is allowed to wonder.

What lies in yonder universe?
A man feels small
Among such wise giants.
For the stars look on,
And know humanity too very well.

Does humanity deserve
Such greatness?
The poet thinks, and wonders;
It does not surprise him, in truth.
Man no more deserves it than the chickens.

Poets, philosophers, and kings;
Men of science and learning;
Curiosity lives in them
Bright as the stars
Darker than space.

Yet they are so few:
Diamonds among a mass
Of dull coal, like stars in the great expanse
Of emptiness.
For many are incurious, and stupid.

Mortality is a curse;
Death and suffering are its arbiters
As surely the knife is to the chickens.
Blood flows, men die, turn to dust.
Nought comes of it.

The poet is right, aye.
Those who gaze at the stars
May one day hope to join them;
Those who think of meat and the earth
Are doomed to join the objects of their desire.

Such is the way of the world
Is it not?
The moon waxes and wanes
Day gives way to night, and night to dawn.
Only the stars can taste eternity.

The Struggle for Fallen Love

I come, at last, to my long and difficult journey in getting the book published. Primarily, the problem has been a lack of time and energy on my part; the simple fact of the publishing industry at present (and for the last ten years or so) is that it requires immense perseverance. It is, in some ways, a numbers game: the probability of getting represented by one agent is very low, so it requires a lot of queries—this is an inevitable outcome dictated by statistics. I’m willing to bet that the number of queried agents required to obtain representation is approximately normally distributed around a mean, but left skewed (i.e. all authors need to query 10+ agents, but some end up querying 100).

Another problem is of course simple faith—in the book, in myself as a writer. The publishing process is by its nature demoralising. So what am I to do? Soldier on, carry my cross? It would seem so.

I shall leave you now, dear readers, for I am to return to Amsterdam and still have much to do. Rest assured, however, that I will return to blogging. I aim to write another article on photography and my experiences with my first DSLR. Until then...

13 Mar 2018

The Journey Continues...

Hello readers!

I have not updated the Magical Realm for quite a long while, for which I am sorry. Winter has finally melted over into spring; the days have lengthened and the temperature has risen, albeit erratically, as is characteristic of Northern European climates. Though the seasons have changed, my progress on getting Fallen Love published remains somewhat glacial.

I queried 17 agents and received a handful of rejections, and another handful of no-replies. One agent asked to see part of the manuscript but ultimately did not go further. This is, in fact, entirely unsurprising: it is difficult to get traditionally published, and rejections are normal. However, all this has meant that I have spent the last 2 months twiddling my thumbs waiting.

Or, well, not quite: I have been working on the sequel. That will remain under wraps for now. (All I can say is, I have made surprising progress.) The focus nonetheless remains on getting a publishing contract for Fallen Love, and perhaps even a two-book deal.

To that end, I have submitted directly to two publishing houses that accept unsolicited submissions. In addition, I will resume querying for agents. Doing this simultaneously may seem strange, but considering the response time of the publishing houses (namely: months) and the fact that an agent can act on my behalf to negotiate a contract, it actually makes sense.

In other news, my life has progressed mostly uninterrupted: I have started a new semester, and have slowly adapted to my new course workload. My new 4K monitor has proven itself very helpful in writing—it renders text nicely, and lets me edit multiple documents at once (a much appreciated boon for this writer).

My usual interest in gaming has led me to try a new game, called Dota 2 (you may have heard of it). However, I soon gave up: the gameplay is far too complicated, and not particularly interesting either. SuperTuxKart and Battle for Wesnoth will continue enjoying my attention, as will the Epic Battle Fantasy series.

In any case, I must leave you, dear reader, before I ramble further. Keep an eye out on the Magical Realm for more writing-related news. Also, pay a visit to the Reviews page up top: there’s a particularly interesting novel I will be reviewing soon. Now, onto work...

25 Jan 2018

New Look, New Book

Hello readers!

I am at last getting back to you after the long pause here on the Magical Realm. I have some news for you: the most obvious is, of course, the new theme. I have redesigned the Magical Realm so that it is a) more interesting to look at (the old theme was getting a bit long in the tooth) b) works better on high resolution displays—that took some testing and c) references Fallen Love, my new novel.

Subtlety is not really thing when it comes to web design, incidentally. The fallen angel background—and the colour scheme, with its blacks, dark reds and light blue accents—are all meant to quickly convey what my blog and book are about. In that respect, I think I’ve succeeded; however, feedback is appreciated, as the current design should still be considered beta.

Speaking of Fallen Love, I have received a handful of rejections from agents, but several more have yet to reply. In truth, finding representation is a slow and sometimes difficult process—I don’t expect to get an agent on board until February at the earliest. I, and you, dear reader, must remain patient.

Instead, this post will be about two other things: a brief discussion about my Spanish course this month, and a slightly longer (but still concise) explanation into my shiny new 4K monitor!

The Monitor: An Explanation of Sharpness

To translate from the marketing jargon, a 4K monitor is a monitor with a 3840x2160 resolution: that is to say, it has 3840 pixels on the horizontal side, and 2160 on the vertical, to form a matrix of 8.4 million pixels.

This is significantly more than a more standard 1080p display (1920x1080 yielding 2.1MP in total) and quite a bit more even than a 1440 display (2560x1440, 4M pixels in total). What does this mean in practice? Well, a few things. Pixel density is one: on a 27-inch diagonal monitor, a 4K resolution results in a ‘pixel pitch’—a measure of how fine the pixels are—of 163ppi. A 1080 monitor at the same size, by comparison, has only 81.5ppi.


The above diagram is a good representation of the phenomenon.

But what does it mean in practice? Images show much more detail, for example: I can now edit my photos and actually see all of my mistakes. If focus is not quite right, or the lens have poor sharpness, or if noise smoothing has smeared detail, or if compression has introduced artifacts; any imperfection is shown up in frightening clarity.

But the biggest difference is text. On a 1080p monitor of the same size, text would look... frankly terrible. (1080p monitors at this size should never have existed: they’re awful for any kind of desktop use.) On a higher resolution 1440p monitor, text would look bearable. On a 4K monitor, text looks... good. Almost as good as a high quality print—the key word being almost.

I will not go into all the details of font rendering and its various technical complexities right now; there are many excellent websites that cover the topic, such as Adobe’s Typekit . I will simply state that it is incredibly difficult to render sharp, clear text on any kind of LCD display—especially one that is desktop size. It’s much easier to print sharp text, and to render it on smaller screens like the ones found in phones.

The reason is ppi, as mentioned above. What we perceive as ‘sharpness’ is determined by how small the individual pixels are relative to our ability to discern them. Sharp text is achieved only when the display has a ppi greater than our eye’s maximum at the display’s typical viewing distance. The PC experts Puget Systems have a nice explanation complete with a ppi calculator: https://www.pugetsystems.com/labs/articles/Can-you-see-the-difference-with-a-4K-monitor-729/

Another variable, which I haven’t mentioned, is eyesight. Old people with low visual acuity can’t tell the difference between a 4K monitor and a lower resolution equivalent. I, however, possess the eyesight of an eagle. It’s a blessing, but also a curse: even my 4K monitor isn’t nearly good enough.

The Monitor Itself: the LG27UD69

That said, I am very happy with this monitor. It looks beautiful, for one: it has fashionable thin bezels, and a curved stand. For two, the stand supports height adjustment and tilt, and ergonomics are vital to comfortable computer use. Thirdly, contrast is good, especially with proper lighting—though the monitor still suffers from backlight bleed (a common foible with LCD screens). Finally, colour accuracy is OK; the monitor is factory calibrated.

If all of the above sounds complicated—and display technology is complicated—let’s just say that it’s a very good monitor. In fact, it’s probably the best monitor at its price point, and it’s almost as good as LCD tech gets.

I say almost, again, because there are 5K displays out there. That’s right: 14 million pixels! There are only two models on sale right now. The iMac is one (the screen is manufactured by LG, of course) and Philips makes the other.

The reason I didn’t buy the Philips, aside from price, has to do with another complicated aspect of display tech: bandwidth. A 4K monitor can’t be connected to just any computer: to run properly, it needs to be connected via the latest version of HDMI (version 2) or DisplayPort (version 1.2+). Those old VGA and DVI cables aren’t gonna cut it. In fact, I had to buy a new graphics card for my desktop; the installation took all day.

A 5K monitor can only be connected in one of two limited ways. Option 1: two DisplayPort 1.2 cables. Option 2: a single DP 1.3 cable. The former isn’t properly supported under Linux. The latter would work best, but there aren’t any DP 1.3 monitors on the market... yet.

Anyway, I’m pleased with my shiny new monitor. Below are screenshots. (Yes, I’m bragging.)


Moving on, I am currently engaged with studying Spanish. The university requires me to study two foreign language courses as part of my degree—a requirement that I dislike intensely. Although Spanish itself is a nice enough language (indeed nicer than Dutch, and not too idiosyncratic) the teaching format just doesn’t work for me. There’s not enough time—only 4 weeks—and there’s too much emphasis on grammar and test-taking.

Still, I must do my best. Español es una lengua muy bonita! Pero no es fácil.

Final Words

This has been a long enough post, and I have conveyed much information to you. I would write more; but alas, time does not permit. My Spanish lessons demand study, and I am occupied with numerous other hassles. I can only ask, instead, that you keep an eye out on the Magical Realm. I am busy now, but there will come the day when Fallen Love will be published. Until then, keep following!

5 Jan 2018

Now it begins...

Hello readers!

There is a considerable amount of news I wish to relay today; therefore, I will start in order of importance. The first and most notable event is my completion of the second draft of Fallen Love. My new novel has been revised significantly—plot points have been simplified and streamlined, character voice has been rethought, and numerous improvements to the fluency of the writing have been made.

The second draft is what I consider to be “ready for viewing”: that is to say, it is significantly more polished than the first draft, and its overall plot structure and character arc closely resembles the final product. (Or so I hope, anyway!) It will, of course, still have to be edited: I am hoping to receive editorial guidance from the publisher who ultimately accepts it for publication. My agent may also have some changes to propose.

Speaking of agents, I have queried several. They are, of course, slow to reply—and by the nature of the modern publishing industry, most of them will reject me. That’s okay; I only need one, after all. Even Stephenie Meyer, author of the Twilight series, received 14 rejections from agents before being represented.

This is why I’ve chosen to title this post “Now it begins...” I have completed another major milestone in my journey—but the way is long. From now on in, it’s a waiting game. So to help you wait, I have updated the page named “Fallen Love” with the new blurb and revised first chapter. Enjoy! (And if you wish to give me feedback, look to the “Contact” page for ways to get in touch with me.)

In other news, I am currently in Romania for the winter holidays. I am soon to return to Amsterdam, where I shall begin learning Spanish before starting my second semester.

To be perfectly honest, this year’s first semester was not easy going. Despite my rather good grades (A, A, A- and B+) it came at a considerable personal cost—to my health especially. My frequently-melancholy self was too stressed, and too preoccupied, with the substantial number of exams, essays and papers. I even developed a minor drinking problem: thankfully, my appetite for alcohol has diminished, and I have drank only a little this holiday period.

But enough about that. I will get through this degree one way or another (it is really only a question of whether I will do well or exceptionally well).

Fallen Love is where my passion really lies–it is the product of more than a year’s work, not to mention the year and a half I spent working on its abandoned predecessor (the Ark, if you recall). There were times when I never thought I’d finish it; there were times when the rest of my life seemed too pressing, too difficult, and overwhelming.

So let me start 2018 with a promise: it’s time to have some fun and relax. Now it begins...

8 Dec 2017

A Festive Season

Hail readers!

It is winter at last, and the weather here in Amsterdam has been... atrocious. It started out well: we had a beautiful day of sunshine on the 1st of December. The second day of December saw fog, albeit rather beautiful fog (as my photos, to be uploaded later, will attest to). Alas these past few days have degenerated into pouring rain—intermixed with hail—howling wind and cold. Alex is indeed rather miserable.

What adds to his misery is that he has altogether too much work to do: he has already done one exam and presentation today, with two more written exams and one oral left. On top of that, he has one more essay to write, and a statistics project to finish.

For these reasons, Alex has been unable to work much on Fallen Love. He is more than halfway through, but recent progress has stalled, and will only really take off again at the end of this month.

Still: there’s no point being grumpy. ’Tis a festive season, after all. This brief update will therefore finish with an excerpt from Fallen Love:

“You wanted to kill him, didn’t you?” I ask. “Not because you should, but because you could.”

“My dad was right about this much. It’s part of me, Conall: the desire to kill. It’s in my nature, like a cat catching mice.”

“But do cats ever become friends with mice?”

“That’s the million euro question, isn’t it?”

I embrace him, suddenly, unable to contain it any longer. His hair is soft against my hands; his body is still and statuesque.

“Make me a millionaire, Mark.”

“Oh, I think you already are, Conall.”

27 Nov 2017

Why Economic Models are Bullshit (Part II)

Hello readers!

Previously, I wrote a post entitled “Why Economic Models are Bullshit (Part I)”. Therein, I covered one of the problematic areas of macroeconomics: namely, that students are badly taught the subject. But that does not tell us enough about the other side of the coin—the reason why macroeconomic models are, by themselves, problematic (aka “bullshit”). In this post, I explain just this.

Before I begin, and in case you are wondering: yes, I am progressing with Fallen Love. I am about halfway through the revision process; I will post an update later on. For the time being, I am extremely busy both with the book and with my university studies. Consider this my final update for the month.

Anyway, onto the topic of today’s post...

The Follies of Macroeconomic Models

I am not the first to criticise an economic model, and in particular, I am not the first to criticise the discipline of economics as a whole. Some critics speak from a position of ignorance; they sometimes make good points, but cannot articulate their criticisms beyond relatively vague generalities. (A few examples: economic models don’t work because you can’t put people in an equation. Or, economics is not a science. Both hold a grain of truth, but are not extended upon beyond platitudes.)

Some critics, however, are economists. Thomas Piketty and Ha-Joon Chang are good examples of the latter, though the venerable Steve Keen is my personal favourite among the rebels. If you have had read these economists, you may detect some of their criticisms among my own; though I quite fancy that I am original. Anyway, vanity is a vice, so allow me to get to the meat of the arguments...

Problem No. 1: economic models are not dynamic. To clarify, by “dynamic” I mean that the models do not explicitly refer to time—either graphically, mathematically, or even in argument. Some economists (especially those who have never done a proper science, like physics or chemistry) seem to think that economic models are dynamic because... time is in there somewhere.

Of course time is present in these models, in some way—they wouldn’t make any sense otherwise. (They make little enough sense as it is!) The problem is that this relationship is dreadfully ambiguous; there is absolutely no clarity about what happens when, and this leads to a number of conceptual errors and oversights.

IS-LM graph

The above graph is a clumsily drawn example, representing an IS–LM model of a small open economy, with e (nominal exchange rate) on the vertical axis and Y (national income) on the horizontal axis. The two sloping lines are IS-curves, while the vertical line is an LM curve. The shift of the IS curve outwards represents a ceteris paribus fall in taxes.

The moral of this story is that, in a small open economy with perfect capital mobility, fiscal policy doesn’t work: you can’t change national income with fiscal policy measures. Even if we assume this is true (there are economists who do not agree with this assessment), the problem is that the graph is extremely obtuse.

There is a whole time dynamic involved here. First, a fall in taxes leads to an increase in Y, which in turn leads to an increase in r (interest rate) as the money supply is fixed. The increase in r leads to a situation where r>r* (the domestic interest rate is higher than the international); this leads to an influx of capital, which in turn drives up the exchange rate e. The appreciation of e leads to a fall in NX, which brings Y back down to the initial Y.

None of that is shown on the graph. We only see a new equilibrium point at e2 and Y. Great explanation there!

Problem No2: economic models confuse cause and effect. If you look at the IS–LM graph aforementioned, you might be forgiven for thinking that somehow Y (national income) affects e (the nominal exchange rate). In the sciences, we put the independent variable on the x-axis, and the dependent variable on the y-axis.

To peruse one of many examples from physics:

Force-extension graph

The story here is pretty straightforward: you apply a force, and the material stretches in a particular way dependent on its material properties.

Occasionally in physics, some graphs don’t follow this convention, usually for reasons of convenience.

The problem is that nearly all economics models have it backwards: they put the independent variable (the causation, the mover) on the Y-axis, and the independent variable (the observed change) on the X-axis. This small change makes economic graphs unnecessarily confusing. In the IS–LM model, e affects Y because e affects NX and Y is dependent on NX; however, there is no clear relationship going the other way round.

In formal logic notation,

(x → y) ≠ (x ↔ y)

This says that (x implies y) is not the same as (x and y imply each other). Or to put it in more comprehensible terms: if I sleep through my alarm I will be late; but if I am late, that doesn’t necessarily mean I slept through my alarm (I could have been stuck in traffic!)

Problem No3: economic models make overly idealised assumptions. This is a big one. Economists say that the art of economic modelling is choosing good assumptions; but if so, economists must be terrible at their job.

Let’s look at the previous model I showed: the IS–LM model under conditions of a small open economy with perfect capital mobility. You may now observe that, actually, well—capital isn’t perfectly mobile. You can’t do a runner with a house. What’s more, houses take time to sell (again, dynamic systems!) and the resale value is not always high (risk element). In many parts of the world, there are restrictions on foreigners buying houses.

Because the assumption of perfect capital mobility is wrong, the aforementioned conclusion is wrong as well. Fiscal policy does have an effect on national income—just look at the UK under austerity. It is thought by many economists that Osborne’s economic policy cost the UK a lot of lost income growth. The Sterling did not depreciate and net exports remained pretty dismal (the former stayed high and the latter stayed negative).

A more useful assumption would have been: assume that some capital assets are mobile while others are not. Determine the share of mobile-assets for the economy you are looking at. This way, you get a much better grasp for what’s actually going on.

Problem No4: vagueness. This is a problem that I have rarely seen mentioned, perhaps because it is of a slightly more philosophical nature. Essentially, what I have noticed in economic models is that they can be quite unclear as to what a concept or variable is referring to.

Take the example of r*, which represents the going interest rate across the globe. Or even just r, which represents the going interest rate in a national economy. My question is: which interest rate does it represent, exactly? Investments have many rates of return. We all know that some investors make a fortune on the stock market; others make a loss. Bonds have different returns based on their maturity period.

If we just take a weighted mean of all these different interest rates, we risk missing some important constituent details.

If we look at the globe, we... observe that there are many interest rates, across both private sector and government investments. Even if we confine ourselves to only government bonds, we see that there are large discrepancies based on the countries’ riskiness (Argentina or South Africa have higher interest rates on their bonds than Germany or the US).

At this point, economists just thought: “Aha! We can model interests rates as being r* + P, where P is the risk premium.”

Except it’s not that simple; the concept of risk premium is itself vague. How do you quantify a risk premium? No one knows. Investors make investment decisions based on their perception of that risk, but the risk itself is uncertain; the interest rate we observe is just the expression of a social belief, not some neat numerical correction.

To put it in philosophical language, the ontological status of the risk premium (and numerous other macroeconomic concepts) is misunderstood. And the consequences are not just philosophical; they can lead to a number of conceptual errors with serious policymaking implications. One prominent example is in neoliberal economics, and its belief in the divine importance of the market price.

In a debate about rent prices in London, the neoliberal economists might say: “All these social housing schemes are nonsense. Why should the state interfere and distort the housing market price?” The use of the word distort is very important—it suggests that the market price is almost like a physical quantity, a reality that should not be meddled with. In reality, of course, the housing prices of London are really just a reflection of the (deluded) expectations of property owners on future prices, among other things.

Problem No5: the role of risk, uncertainty, and expectations. This is another area of economics that is under active research, and in which we are starting to see improvements. I’ve decided not to go detail here; the topic is quite technical, and anyway, I’m doing research on it right now. Perhaps I will cover it in a future post. Until then, I will (again) recommend reading the venerable Steve Keen, along with various other economists such as Frank Knight and Gunnar Myrdal.

Concluding Remarks

What I have written ultimately only scratches the surface; there are much more fundamental questions to be asked about macroeconomics and its ability to accurately model and predict real world economies. Nevertheless, I think the five key problems I have highlighted constitute a good set of methodological problems with macroeconomics—and they are problems that can be feasibly solved.

My conclusion for students, policymakers, and other economists is this: presently, economic models are pretty rubbish. They are in urgent need of improvement—or else economists will find themselves stuck in the credibility crisis they are now in. But better models will demand the work of newer, wiser, and better educated thinkers.

In other words, we need a twin revolution; a revolution in the way we teach economics, to attract stronger students from a wider variety of fields, and a revolution in the way we do economics. Will the field rise up to this challenge? Perhaps. People like Steve Keen give me hope. On the other hand: there are a lot of economists who prefer to keep their head in the sand. What can I say? I hope they die quickly.

17 Nov 2017

Why Economic Models are Bullshit (Part I)

Hello dear readers!

Previously, I wrote on a number of topics, chiefly among them: my exams, and Fallen Love, my upcoming novel. Alas the former has prevented me from working on the latter; Fallen Love will probably not be finished until January, as I stated. Still, with my exams finally over, I can get back to working on it.

You may be wondering as to the title of this post. Your guess would be correct—this post is indeed a brief argumentative essay (read: rant) about economic models, on which I have spent the last week of my life revising for. I am taking both micro and macroeconomics, but this post will mainly be about macro; I will get onto why in a moment.

A Pedagogical Disaster

The simplest reason for my particular hatred of macroeconomic models has to do with teaching. That’s the simple reason, but the more complicated reason has to do with content (though the two are, of course, tied together).

To put it simply: the teaching has been disastrous. More than half of our class failed the first exam—this is in a selective university, mind you, with many of the student body having attained excellent grades in secondary school. One reason was the teacher. We had two teachers, and the first was quite dire.

“That’s one bad apple,” you say. “There are bad teachers in the world. That doesn’t mean macroeconomics is bullshit.”

This fact alone does not prove my point—except that this is not a single, isolated phenomena. Economics students across the world routinely struggle with their courses, complaining that they do not really understand it; that indeed, “it”—macroeconomic models—don’t make any sense. One bad teacher is one thing. But can the entire pedagogical structure of economic teaching be at fault?

I would argue yes. The most common complaint I’ve heard in my university is that (and I am paraphrasing only slightly) “I draw the graphs, but I don’t know what it means or why.” There are a few reasons for this. To begin with: concepts. Macroeconomic concepts are strongly under-explained. The course introduces things like “inflation”, “GDP”, “unemployment” and (my personal favourite) “money”—but these macroeconomic concepts differ significantly from the prima facie conception that students begin the course with.

A case in point: a number of students conflated the AS–AD model with the supply-and-demand model from micro economics. They even sound similar—one is “aggregate” supply and demand, the other just vanilla supply and demand.

AS–AD graph

Microeconomic supply-and-demand graph

Although they look extremely similar, they aren’t the same. The microeconomic model has P (prices) on the vertical axis and Q (quantity) on the horizontal axis—this arrangement is problematic, but I’ll get to that. Anyway, the AS–AD model has P (price levels) and Y (real GDP, output) on the respective axes. These are different concepts. Price levels are a measure of weighted, generalised prices across a macroeconomy (usually they are calculated in the form of the CPI)—they’re not the same thing as the price in a market. Y, representing real GDP, is sometimes called output, leading students to conflate it with quantity output.

Money is the worst, however. Students have no idea what money actually is (in fact a lot of economists don’t understand what money is, but students are even worse). In a macroeconomic context, money doesn’t just mean the euros in your pocket; it represents a wide range of things, from liquid assets held in bank accounts (M1) to savings accounts (M2) to more nebulous concepts of money that are too technical to go into here.

This is also why students struggle with the IS–LM model, which rests on a complicated set of assumptions about money and what money does in an economy.

Anyway, onto the next pedagogical error: mechanistic teaching and oversimplification. Our teachers presented all of these models as a series of mechanical steps, expressed in equally mechanical equations. “What happens if taxes increase under the classical model?” (Some curves shift.) “What happens if labour supply increases under the AD-AS model in the short-run and long-run?” (A complicated mess.) “What happens in the Mundell-Flemming model if, under a fixed exchange rate condition...” (I give up.)

There was very little explanation of why all these things happened. Why would a government want to increase taxes anyway? Why does the model look at these variables? What explanatory power do these models have, and what assumptions do they make?

These are all key questions that remained unanswered. This leads me onto the third pedagogic mistake: not teaching history. These models did not fall out of the sky. They were developed by economists—in a particular time and place, in a particular intellectual climate, and in a particular historical context. It’s difficult to understand these models, much less criticise them or apply them, without this precious context.

Yet, even without all these mistakes of pedagogy, there are more fundamental reasons why macroeconomic models are difficult for the students to comprehend. To repeat the title of this post: macroeconomic models are bullshit.

Conclusion Part I

I realise that you are probably tired of reading this, dear reader, so I will save my juicy critique of macroeconomics for the next post (titled “Why Macroeconomics is Bullshit, Part II”). For the time being, I will let you ponder the parlous state of economics teaching in our schools and universities.

Until then, make sure to check out Fallen Love in case you haven’t already.