tag:blogger.com,1999:blog-2546602206734889307.post3549063221743464716..comments2024-03-29T12:16:15.785+00:00Comments on mainly macro: Fiscal policy heroesMainly Macrohttp://www.blogger.com/profile/09984575852247982901noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-2546602206734889307.post-22851565021323707622012-03-04T21:22:38.999+00:002012-03-04T21:22:38.999+00:00I agree. I took high school calculus with Allen R...I agree. I took high school calculus with Allen Rivlin ( or as he liked to spell it Alllen Rivlin) son of Alice. My other contact with her was I refereed a manuscrpt trying to assess the possible benefits of competition between public agencies, and in particular the CBO and the OMB. The authors noted that once the only US fiscal council was the OMB at the White House whose director serves at the pleasure of the President and which was systematically over optimistic. Then congress set up the CBO controlled by Congress. The authors noted that OMB forecasts improved and had recently become more accurate than CBO forecasts.<br /><br />I had to note that they may have only discovered that Alice Rivlin is immune to politica<br /> Pressure as she was the first head of the CBO and had, in the years just prior to submission of the manuscrpt, been head of the OMB. The paper was published in The Journal of Public Economics.Roberthttps://www.blogger.com/profile/14455788499385673507noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-41103821586692459402012-03-04T09:17:08.451+00:002012-03-04T09:17:08.451+00:00People Aren't Smart Enough for Democracy to Fl...People Aren't Smart Enough for Democracy to Flourish, Scientists Say<br /><br />http://news.yahoo.com/people-arent-smart-enough-democracy-flourish-scientists-185601411.html<br /><br />Dunning told Life's Little Mysteries.<br /><br />He and colleague Justin Kruger, formerly of Cornell and now of New York University, have demonstrated again and again that people are self-delusional when it comes to their own intellectual skills. Whether the researchers are testing people's ability to rate the funniness of jokes, the correctness of grammar, or even their own performance in a game of chess, the duo has found that people always assess their own performance as "above average" — even people who, when tested, actually perform at the very bottom of the pile. [Incompetent People Too Ignorant to Know It]<br /><br />We're just as undiscerning about the skills of others as about ourselves. "To the extent that you are incompetent, you are a worse judge of incompetence in other people," Dunning said. In one study, the researchers asked students to grade quizzes that tested for grammar skill. "We found that students who had done worse on the test itself gave more inaccurate grades to other students." Essentially, they didn't recognize the correct answer even when they saw it.<br /><br />The reason for this disconnect is simple: "If you have gaps in your knowledge in a given area, then you’re not in a position to assess your own gaps or the gaps of others," Dunning said. Strangely though, in these experiments, people tend to readily and accurately agree on who the worst performers are, while failing to recognize the best performers.<br /><br />Economics has been overrun by incompetence, which you see as an ideological problem, but it is more than thatAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-37698979689425947782012-03-03T14:51:19.751+00:002012-03-03T14:51:19.751+00:00part of a trend . . .
Simon, I really enjoy you b...part of a trend . . .<br /><br />Simon, I really enjoy you blog, agreeing with many of your perspectives.<br /><br />However, I don't agree that the closing of fiscal counsels are part of a trend.<br /><br />They reflect, to me, a far deeper problem with economics which is that it is not about economics at all, it is about ideology, about which you have written (and written well). For example, in January you wrote:<br /><br />I have argued elsewhere that the problem too many macroeconomists have with fiscal stimulus lies not in opposing schools of thought, or the validity of particular theories, or the size of particular parameters, but instead with the fact that it represents intervention by the state designed to improve the working of the market economy. They have an ideological problem with countercyclical fiscal policy. But the central bank is part of the state, and it intervenes to improve how the economy works, so this ideological view would also mean that you played down the role of monetary policy in macroeconomics. So ideology may also help explain a lack of familiarity with the models central banks use to think about monetary policy. In short, an ideological view that distorts economic thinking can lead to mistakes.<br /><br />My two cents is that, and this is a very long term project, economics needs to throw out all the ideologues. Now the purge will be large of the right (Taylor, Cochrane, Lucas, Greenspan, Minkaw, and all Hayekian and Austrians come to mind) but there are candidates on the left as well (Summers and Romer as disqualified due to interest and bias).<br /><br />IOW, economics needs to regroup with a small central core of economists who believe there is a very large role for governments and start anew.<br /><br />Otherwise, it has no chance of advancing and 80 years this is where the science will be (from Economics of Contempt):<br /><br />After reading John Taylor and John Cochrane's analyses Lehman's failure, I'm beginning to understand how it's possible for economists to say that "we're still arguing about the causes of the Great Depression." It's generally hard to come to an agreement when one side simply lies, or refuses to acknowledge undeniable facts.Anonymousnoreply@blogger.com