Monday, February 04, 2013

Econobots

Despite the unenthusiastic reception of my last venture into economic engineering, let me persist a bit. Econobots are already very busy, so I gather, doing microsecond trading and carrying out similar missions. Why not put them to work on macro policy?

Instead of putting out some crap about aiming for, say, 2% inflation, and then screwing around with some monetary policies which might or might not approach that goal, why not turn it over to the Macrobot? Turn the task over to a PID controller and let her go.

My theory is that the real reason is probably the fearsome whine emitted by the bankster crowd. If Mario Drahi or Ben Bernanke promises firm action the rentiers know that if they screech loud enough, Ben, or Mario, or Abe will pull his punches. PID controllers are less accomodating.