If Britain’s leading and foremost modern monetary theory expert were asked about this would he agree?

The following equation is always and everywhere precisely true, to the very last decimal point:

M*V = C + I + G + (X-M)

And if you then said it is something Milton Friedman liked, MV=PQ, would he still agree?

I take it that the equation is one of those tiresome identities from which Economists delude themselves that they can infer truths about the world.

“to the very last decimal point”

Plus or minus the margin of error in estimating the value of any of the terms. Let alone the compound error…

The only reason you end up with decimals is because you need to work with units in the order of 10^6, if not 10^9. So any answer you get implies “give or take a couple tens/hundreds of millions”..

Which is not exactly what people (especially actual scientists) have in mind with the term “precisely true” , nor “accuracy”.

Hence economy ≠ science

And of course you have to bear in mind that the different ways of measuring GNP never come to the same number, adding still more uncertainty to this notional identity

Grikath – but we can know that the equality holds

even to the very last decimal pointeven if we don’t know the quantities. Consider that we know the current on either side of a resistor is equal, even if we are unsure what that current might be.@dcardno If you cannot accurately know the quantities involved, you cannot check the validity of the result, let alone reproduce it. A key doctrine in science.

It’s the difference between math and engineering. A mathematical equation may be logically valid, and therefore infinitely accurate. If, however, you cannot test the equation against reality in any meaningfully accurate way, it just a collection of scribbles only interesting to theorists and dreamers.

And therefore

notscience.There’s a reason most pure mathematicians do not refer to themselves as scientists. They’re mathematicians..

Like the old philosophers, they

hatethe thought of any of their stuff being sullied with practical applications..“Consider that we know the current on either side of a resistor is equal”

And actually it isn’t… That would be a serious breach of the first law of thermodynamics…

It’s just that, just like the measuring tools in economy, the instruments used were not accurate enough to show the difference. Ohm’s Law, just like Newton’s work, sort of, if you’re not looking hard enough.

Perhaps a better example than dcardno’s would be an equation that follows immediately from the physical definitions, and therefore is satisfied with complete accuracy by definition. There are plenty of those to go about – economics isn’t unique in having certain equations true by definition, nor in having quantities that are a bugger to measure and can produce different results if you use a different measurement method. Nor indeed unique in being limited largely to observational data with experimentation often difficult or impossible. Plenty of good reasons for separating economics, as a social science, from the physical sciences, but not convinced this is the most compelling.

“I believe that economists put decimal points in their forecasts to show they have a sense of humor.” – William Gilmore Simms

Grikath – that’s interesting. Assuming a really simple circuit – a battery and a resistor: the current flow on the positive and negative sides of the resistor will be different, I take it? Where do the extra electrons go, or where do the excess electrons come from?