House of Paine

mister B's black box

  expert system lays 
off 3 million workers 



read and weeep :

=============================


WASH POST



"Before Mr. Bernanke came to Washington
 -- and long before 
President Bush nominated him 
to run the Federal Reserve -- 
he proposed creating 
a machine 
to crank out the central bank's 
interest-rate decisions"

Ben S. Bernanke
, then chairman of Princeton University's
 Economics Department
 worked with a colleague 
in 2001 to design a mathematical model
 that could absorb economic information 
and recommend how to adjust 
short-term interest rates 
to keep both inflation and unemployment low"

 

. 
  "  "We don't mean to suggest seriously 
that machine will replace humans 
   in [Fed] policy-making," 
Bernanke and his co-author wrote 
in an academic paper
 "But having such a system
 would have several advantages," 
similar to having an automatic pilot
 on an airplane, they said."


--------was that just ....--------------

" Bernanke the professor, 
sharing his musings with fellow theoreticians"


------- or will
an empowered  
 Bernanke ...--------

" seek to put the central bank 
            on a type of autopilot"





-----------------------------------

 the interest-rate machine vs greenslime  


"Bernanke and his co-author
 ran a test comparing the decisions
 their "expert system" recommended 
with those made in the real world 
by Alan Greenspan 
since he became Fed chairman in 1987"

" The machine lost"

" Its suggestions would have produced
 about the same average inflation 
but higher average unemployment 
than the Fed's policies"

"We are moderately encouraged 
about the potential
 of an expert system 
to help policymakers" they wrote
 concluding
 "However, there clearly remains 
considerable scope for human judgment 
about special factors 
or conditions in the economy 
in the making of [Fed] policy."


--- how will we know

when the machine takes over -------------