Helms School of Government
Doctor of Philosophy in Public Policy (PhD)
Primary Subject Area
forecasting, modeling, chaos theory, asset bubbles, black swans
Cardell, Douglas W., "An Investigation into the Likelihood that a Centrally Planned Economy Can Provide Greater Economic Good than Spontaneous Order Created by the Free Market" (2022). Doctoral Dissertations and Projects. 3719.
This paper will address whether it is possible for an economy, planned by experts, to result in greater economic good than can be achieved by spontaneous order created by the combination of individual choices that make up the free market? This paper approaches the question by studying the viability of economic forecasting because planning an economy requires making economic forecasts. There are at least three domains that impact forecasting: the nature of forecasting and modeling in general in a chaotic environment, the effect of asset bubbles, and the impact of black swan events. There is a great deal of research focused on modeling and forecasting in general and in the economy specifically. There is also substantial research dealing with the growth and collapse of asset bubbles. There is very little research investigating black swan events. A lack of an overarching synthesis that shows how these three domains tie together represents a significant gap in the research. Merging the research on models and forecasting with research on government economic interventions and past economic disasters resulting from bubbles and the failure of governments to predict and respond to them will help close this gap. This synthesis will demonstrate the impossibility of economic forecasting. It will show that since forecasting is impossible, then planning is also impossible. It will propose a research-supported role of government in the economic sector and an appropriate government action designed to eliminate asset bubbles by directly addressing rent-seeking, the desire to make a quick profit without adding any value. It is this rent-seeking that creates the bubbles. Demonstrating that central economic planning can never provide more significant economic benefits than the free market and what actions the government might take instead will also help fill the gap in the research mentioned earlier. Narrowing this gap in the research will be of great value to those evaluating the d