Part 5/10:
Cartik contrasts this academic environment with the tech industry, where continuous feedback loops drive innovation and optimization. In tech, researchers and developers constantly test, refine, and adapt their products based on real-time data. This iterative process fuels wealth creation and adaptability. Conversely, economics and finance lack this dynamic feedback mechanism, resulting in sluggish responses—like central banks acting 18 months behind the curve during economic crises.
The Extremes of Economic Practice
The critique delineates two stark extremes in economic practice:
- On one end, highly theoretical economists, often employed by government or academia, produce models and predictions that are difficult for the public to understand and often incompatible with common sense.