Last week at an economics  seminar the focus was on modeling the speed of recovery. The method was to get data by industries. Each industry had a different curve of recovery, all recovering back to pre COVID output.

There was no room in the model for the emergence of new industries or trends – green jobs for example. The model ends up then supporting a very conservative – no structural change – agenda.

This seems to be an artifact of the mathematizing of the data because assumptions have to be made to make modeling and equations possible. The assumption of total recovery makes modeling possible. There are other assumptions but they are more like narratives than equations because the model would have to make assumptions about where divergence from recovery happens, and this is more a narrative than simple changing the parameters. We do not teach people to create such narratives and so end up supporting the most conservative part of public policy. In this case recovery rather than taking advantage of economic stress to rethink the economy.