Arnold Kling has become a leading critic of Hydraulic Macro, the notion that you add up economic aggregates pull a few levels and watch the economy respond.
In response he suggests that the economy is incredibly dynamic with millions of jobs being lost or gained every month. He points to JOLTS data as evidence.
I couldn’t agree more. I’ve argued that the economy is a dynamic churn ever since graduate school. The thing is – so is hydraulics. All liquids are composed of millions of rolling molecules going to and fro. The net of all of that is what we think of as macro level hydraulics.
Personally, I prefer the comparison to fluid dynamics more generally, which allows for interface instability, distinctions between compressible and non-compressible flow, turbulent and laminar flow, etc.
We have millions of particles that are sometimes moving in patterns that can easily be modeled and then sudden breaks where those easy models fall apart completely.
We have micro world that is much richer and much more dynamic than the marco world we observe.
And we have everyday phenomena which are fundamental to our society but scientists still have trouble explaining to laymen why they occur.
Wikipedia on aerodynamic lift
An explanation of lift frequently encountered in basic or popular sources is the equal transit-time theory. Equal transit-time states that because of the longer path of the upper surface of an airfoil, the air going over the top must go faster in order to catch up with the air flowing around the bottom. i.e. the parcels of air that are divided at the leading edge and travel above and below an airfoil must rejoin when they reach the trailing edge. Bernoulli’s Principle is then cited to conclude that since the air moves faster on the top of the wing the air pressure must be lower. This pressure difference pushes the wing up.
However, equal transit time is not accurate and the fact that this is not generally the case can be readily observed. Although it is true that the air moving over the top of a wing generating lift does move faster, there is no requirement for equal transit time. In fact the air moving over the top of an airfoil generating lift is always moving much faster than the equal transit theory would imply.
The assertion that the air must arrive simultaneously at the trailing edge is sometimes referred to as the “Equal Transit-Time Fallacy”
This is Fluid Dynamics and its not as different from macroeconomics as you might think.