tag:blogger.com,1999:blog-2546602206734889307.post5808846533010206800..comments2024-03-28T04:29:22.717+00:00Comments on mainly macro: What are academics good for?Mainly Macrohttp://www.blogger.com/profile/09984575852247982901noreply@blogger.comBlogger49125tag:blogger.com,1999:blog-2546602206734889307.post-82915516303826266882014-08-08T18:48:14.928+00:002014-08-08T18:48:14.928+00:00"So two gave the wrong answer, but if you kne..."So two gave the wrong answer, but if you knew who they were you would not be surprised." Well I guessed one out of two (Minford). His passionately hacktackular loyalty to the Tories is world famous.Roberthttps://www.blogger.com/profile/14455788499385673507noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-1507846376161355752014-08-05T09:48:09.806+00:002014-08-05T09:48:09.806+00:00"You are conflating "you cannot model ev..."You are conflating "you cannot model every aspect of the economy perfectly" and "DSGE does not model the economy as a whole adequately". The idea you need Acemoglu-like knowledge of each sub field to understand hat's going on at a macro level is just a relic of economics' obsession with reductionism."<br /><br />I don't understand any of that. You were asking if DSGE was going to provide us with a "comprehensive understanding of the economy" and I answered: no. I interpreted "comprehensive" to mean not just where financial crises come from, or the impact of austerity, but also labour supply questions, questions around international trade, strategic behaviour by firms, the causes of economic growth, and so on and so forth. Which does require digging into sub fields. What has that got to do with reductionism? If you meant something different by "comprehensive understanding" then fine. Luis Enriquehttps://www.blogger.com/profile/09373244720653497312noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-82792196713335508712014-08-04T21:56:01.150+00:002014-08-04T21:56:01.150+00:00"However, if he [Krugman] said something like..."However, if he [Krugman] said something like that in a period of inadequate demand, unemployed labour is hurting the economic potential of the country and has harmful and unnecessary social effects, and presents evidence, people will listen.<br />If, however, he says that we should do this because gimmick like an ISLM model with two diagonal lines, or a representative agent model - says so, people will rightly not be interested"<br /><br />He actually says both! The underemployed factors of production argument appeals to me and some others. but for someone of a Thatcherite persuasion ("Government is like a household, it should live within its means") the argument holds no water at all. So you try an ISLM approach showing that it doesn't only work in practice, it can work in theory too - and they still don't listen! Ultimately they don't listen because (as Krugman is saying more and more loudly) the political imperative of shrinking the state is more important than the actual results of any given approach.<br /><br />But you do need a theory to explain what you want to do: otherwise you are guilty of what my teachers used to call 'casual empiricism' - picking facts to suit your argument.DavidShttps://www.blogger.com/profile/11679346381085854499noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-30918020022409890562014-08-04T15:13:00.693+00:002014-08-04T15:13:00.693+00:00"We know less than 50 years ago."
Readi..."We know less than 50 years ago."<br /><br />Reading that Goodfriend article, you would really have to wonder. In fact it was classic Minsky being played out - the development of groupthink at the tip of the crisis. Where for example was the knowledge we acquired from Kindleberger or Harrod (and many, many others) about the dangers of deregulation combined with easy monetary policy before the crisis? And the Washington Consensus was a good reason why the linking of academic economists and the policy making bureaucracy stifles diversity and debate and becomes dangerous.<br /><br />A simple 101 course in Keynesian, Marxian and Neo-liberal theory I think is enough for people to see that all these SOT have merit and there is not necessarily a single right answer. The truth is on a case-by-case basis that can only be determined with (preferably unmanipulated or obfuscated) evidence.<br /><br />I have a lot of respect for what Paul Krugman is doing. I know that he has not taken the easy option if it was to be lauded as an elder statesman in the profession. Like John Kenneth Galbraith before him he feels he has a public responsibility outside the comfortable confines of his profession.<br /><br />However, if he said something like that in a period of inadequate demand, unemployed labour is hurting the economic potential of the country and has harmful and unnecessary social effects, and presents evidence, people will listen.<br /><br />If, however, he says that we should do this because gimmick like an ISLM model with two diagonal lines, or a representative agent model - says so, people will rightly not be interested.<br /><br />Academic economists and non-economist academics, academic and non-academic economists, business people, social workers and others out on the field with first hand knowledge of actual conditions - the views of all these people are important.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-47618264176822917612014-08-04T14:14:22.712+00:002014-08-04T14:14:22.712+00:00If you had read other stuff I have written you wou...If you had read other stuff I have written you would know I have some sympathy with what you say. But how far do you want to take this? Are you really saying that someone like Krugman does not effectively defend his own ideas? Are you saying that we know less now than we did fifty years ago? Are you saying that financial journalists should treat the views of academics about their subject as of no more interest than the opinions of anyone else?Mainly Macrohttps://www.blogger.com/profile/09984575852247982901noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-59029274174386631712014-08-04T13:52:51.186+00:002014-08-04T13:52:51.186+00:00"We are in danger of entering an Orwellian wo..."We are in danger of entering an Orwellian world, where for some the truth is whatever they want it to be. Devaluing academic knowledge is part of that process."<br /><br />The only way you can counter that Simon is being open to other ideas and knowledge. At the very least you can more effectively defend your own ideas. There has not been linear progress in economics - what Goodfriend calls "advances". There has been swings in conventional wisdom: fads. Not teaching history - or teaching a selective of view of it like Goodfriend does, or other views of the world, is when people start taking opinion (dressed up as science or not) as fact.<br /><br />To directly answer the question. There are people who say that the 1920s bust was important in removing distortions that arose from the boom. You could make the case that productivity gains and industrialisation during this time in many countries was particularly rapid. When the economy recovered (with the help of Keynesian policy or not), it was then a more healthy one. Perhaps the downturn in the cycle was needed to purge the economy of distortions that could lead to a distorted recovery? We need to ask a Schumpetarian or Austrian. But where are they??? I do not think they do not exist because their intellectual frameworks are bad ones.<br /><br />And in any case I can see how Goodfriend's conclusion set up the case for austerity:<br />"The consensus model of monetary policy reinforces four main advances in monetary policy arrived at in practice: the priority for price stability .... the importance of credibility for low inflation..."<br /><br />The priority of monetary policy is to assist in the execution of the democratically elected government's macro-economic programme.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-18438224098958365842014-08-04T12:21:48.493+00:002014-08-04T12:21:48.493+00:00I think you and Jamie are really missing the point...I think you and Jamie are really missing the point here, and the real danger. Let me go back to the question 'does the 2013 recovery vindicate 2010 austerity'. The answer to that question is no, whatever your school of thought. Yet because the question became political, half of city economists gave the wrong answer, and perhaps the best financial newspaper in the world wrote a leader endorsing the wrong answer.<br /><br />We are in danger of entering an Orwellian world, where for some the truth is whatever they want it to be. Devaluing academic knowledge is part of that process.Mainly Macrohttps://www.blogger.com/profile/09984575852247982901noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-71871223038382297092014-08-04T11:43:53.728+00:002014-08-04T11:43:53.728+00:00The answer Simon is yes, in addition to what other...The answer Simon is yes, in addition to what other schools of thought have to say on the matter. I think what Jamie and others on here dislike is group think which leads to a fad-prone subject. (My guess is that Jamie is a humanities guy rather than an applied mathematician - they seem more likely to be able to accept that the truth is often what you make of it.) It is the job of academics to discuss all the explanations and options. After critical analysis of all of them, sure they can recommend. It is then the job of the policy maker to decide which one to run with after they know all the arguments.<br /><br />Back to Marvin Goodfriend's smug Monetary Policy consensus in the link above. He attributes far to much credit for containing inflation to Volker's MP and is very dismissive of other factors - including the pyschological such as the general malaise of the 1970s ending with Reagan Morning in America which started almost immediately with the return of the hostages and, after scaring everyone in the very late 1970s with the invasion of Afghanistan and the re-escalation of the Cold War, the weakening of the Soviet Union. To an historian these are absolutely key facts in understanding a lot of the economic and political changes taking place during that time to which inflation was also connected. Inflation is heavily linked to government (political) credibility and its ability to exert authority. This is a big lesson from Interwar history. It was not so much that Volker's MP contained inflation, it was more that the US government after a lot of humiliation could be seen as a government with the authority to carry out what it says it will. These things need to be considered, even if they do not fit into the neo-classical synthesis which seems to be more important than the facts themselves.<br /><br />Goodfriend says " leading Keynesian economist James Tobin (1980, p. 64) thought that “the price- and wage-setting institutions of the economy have an inflationary bias. Consequently, demand management cannot stabilize the price trend without chronic sacrifice of output and employment unless assisted, occasionally or permanently, by direct incomes policies of some kind.”<br /><br />But I think these arguments deserve more attention than simple dismissal. Given structural unemployment problems. active government intervention is likely to have serious need of consideration, and perhaps also direct prices and incomes policies to deal with deflation. But ouch! That means government planning!<br /><br />Goodfriend sums up the consensus as <br /><br />"The consensus model of monetary policy reinforces four main advances in monetary policy arrived at in practice: the priority for price stability; the targeting of core rather than headline inflation; the importance of credibility for low inflation; and preemptive interest rate policy supported by transparent objectives and procedures"<br /><br />All of things should be considered very controversial. In fact, despite all these so-called advances, these are classic arguments for the Gold Standard. <br /><br />The only way you can really judge them on their merits is seeing what Post Keynesians and other have to say about this.<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-46520977726297288352014-08-02T19:01:12.201+00:002014-08-02T19:01:12.201+00:00Thoughtful07 said: “Economists debate the nature o...Thoughtful07 said: “Economists debate the nature of their science: Is it positive or normative?”<br /><br />A large part of the problem with economics is that economists present their subject as though it is like physics, and that is not credible. Three points.<br /><br />First, physics is concerned with the simplest, most fundamental and non-changing aspects of nature. Economics is concerned with a complex, evolving man-made system which is buffeted with unpredictable shocks all the time including political changes, technology discoveries and natural disasters. There are right and wrong answers to questions in physics, and many things can be predicated accurately, but it’s not clear whether there are similar answers in economics.<br /> <br />Second, economists are openly partisan in presenting their views. Even if there were a right and wrong answer in economics, it is lost beneath the political posturing and name calling BETWEEN economists. If economists want to be treated as value-neutral scientists then they can’t also express strong political views as this will alienate the very people they are trying to persuade with their arguments. Similar constraints apply in other professions. A lawyer may have to defend someone he believes to be guilty. In that case, he has to compartmentalise his professional role and his personal opinion. It may be that it is impossible to present economic advice without appearing partisan, but that just means that non-economists will see any such advice as partisan and ignore it when it conflicts with their own political priors.<br /><br />Third, for better or worse, we live in democracies where politicians seeking re-election will follow policies that will attract voters. Economists have to adapt to that system. If we want better economic policies then the most effective way of achieving it is to educate sufficient people in the electorate to demand these policies. Economists appear to have no interest in this. <br /><br />When I refer to the purpose of academic economists I mean the services they provide to others: advisory and educational. Over and above these roles, economists can develop whatever research programmes they can find funding for. I have no desire to limit their imaginations.<br /><br />I don’t believe that any economist should tell the rest of us what to do. Advisory services provide advice while leaving the final decision to the client. That’s true whether the client is a political policy maker or a Wall Street executive. If economists want to be political decision makers then they should stand for election.<br /><br />Non-economists have real problems in working out what to make of economic advice. A couple of examples.<br /><br />If Scott Sumner & Nick Rowe recommend one type of stimulus and Paul Krugman & SWL recommend another type of stimulus then how should non-economists decide which advice to follow, or vote for, without resorting to political priors? If economists can’t even agree with each other on what levers should be used to stimulate the economy, never mind the degree to which these levers should be used, then how do they expect non-economists to adjudicate these disputes? <br /><br />If the blogosphere contains representatives of at least two types of Keynesian economics then how should non-economists decide which to believe? If Post Keynesians accuse New Keynesians of selling out the legacy of Keynes, and New Keynesians reply by pretending that Post-Keynesians don’t exist then what should non-economists make of this behaviour?<br /><br />If economists are either unwilling or unable to help non-economists with these problems then what will happen is that non-economists will simply revert to their own political priors and ignore the economists. I think that is what is happening and it's why SWL et al get so frustrated. That's why they write posts on 'what are academics good for' and that's why no-one, including other economists, comes up with a convincing answer to their question.<br /><br />Finally, in case of doubt, I support stimulus policies. This debate is not about a specific policy. It's about economists.Jamienoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-35822628009021074982014-08-02T16:38:38.021+00:002014-08-02T16:38:38.021+00:00This comment has been removed by the author.Jamiehttps://www.blogger.com/profile/03489060325921337036noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-85177223271363336372014-08-02T15:04:08.490+00:002014-08-02T15:04:08.490+00:00First, why blame the teacher for the student's...First, why blame the teacher for the student's grasp of the subject matter, especially when the student hasn't taken the class?<br /><br />Second, economists debate the nature of their science: Is it positive or normative? In the former case, economics is similar to physics, chemistry and the other "exact" sciences in that it is "value free". By "value free", I mean that practitioners seek or invent qualitative narratives of of existing events (as described/captured by numerical data) that can be restated in mathematical term that satisfy necessary and sufficient conditions for such statements to be true as this concept is generally accepted by the particular scientific community; theory follows data, which follows hypothesis, which, in turn follows theory in a virtuous cycle. In the latter case, values (including whether one's science is positive or normative) precede theory. We identify such values by examining the language the scientist uses to explicate his theories. So-called "heterodox economists" offer the theories of marginal productivity, marginal utility (indeed utility theory as a viable concept in any circumstances, likening it to a mathematical theory with a null set as its domain) as descriptions of actual behavior and data and Pareto optimality as a desirable outcome (using "optimality" as the descriptor is a value judgment).<br /><br />Referring to "The purpose of academic economists" exemplifies the practice of structuring language to limit discussion. This phrase limits the discussion to which single purpose academic economists serve. Academic economists and academic economics serve several purposes, among which are: 1) to educate and inform themselves and others about economic events and data or the economic consequences of "non-economic" events or data, 2) to advise individuals and organizations as to the consequences of decision options and the behavior that such decisions are likely or unlikely to drive, and 3) to predict the outcomes of such behaviors.<br /><br />A fourth possibility is that economists should actually tell us which outcomes to achieve, i. e., "tell us what to do". The economists at the IMF regard this as their mission, for example. But, this observation raises the question as to what is or who are "academic economists" and what separates "non-academic" from "academic" economists? This question then leads us to this question, viz., "Should non-academic economists (IMF, Wall Street, City, Wall Street, trade or industry association, government-agency, or unemployed economists among them) tell us what to do, then?" Or, given their ticket to the club of economists (the Ph. D. from an accredited program), are these economists special cases of "academic economist"? Further, if they are not academic economists, should they be allowed, asked or required to tell us what to do?Thoughtful07https://www.blogger.com/profile/16716231223315759717noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-59357493597103139212014-08-02T02:22:33.665+00:002014-08-02T02:22:33.665+00:00I just wrote a book about using data to govern ins...I just wrote a book about using data to govern instead of ideology. Empiricism is ignored at our perile. My book is called "Three Handed Economist" and is available in paperback and kindle at Amazon.com.Mark Flowershttp://www.modernsense.netnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-73895108446180391292014-08-01T20:21:59.370+00:002014-08-01T20:21:59.370+00:00I agree that models should help us discard naive i...I agree that models should help us discard naive intuition. The question for me is whether DSGE - a sophisticated, non-intuitive modelling framework - gets over intuition in a way that is empirically reliable, or if it can simply be used to churn out almost any counterintuitive result with the right assumptions. If it's the former, this should be easy to demonstrate with evidence; if it's the latter, then all we've got is our intuitions in another form, since they go in with the choice of assumptions. <br /><br />The recent EM paper we argued about had this in droves, and reading the one above I'd argue that the conclusions about the efficiency of government spending are driven by the assumptions about public goods, while the assumptions about inflation are driven by the degree of price stickiness. This isn't to dismiss the latter: I haven't looked at it fully enough. But I'm just suggesting that enough of DSGE can be found in the assumptions that I don't think it helps us beyond historical experience, a few 'principles' and our priors.Unlearningeconhttps://www.blogger.com/profile/13687413107325575532noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-58465450443239214352014-08-01T13:53:01.223+00:002014-08-01T13:53:01.223+00:00SWL: “The consensus I talk about here is that fisc...SWL: “The consensus I talk about here is that fiscal stimulus reduces unemployment. So calls for pluralism in this context is that we should instead listen to Austrians who say it has no effect?”<br /><br />I think you are misunderstanding what people mean by pluralism. In an earlier comment I said that I thought that economists needed to separate out UNDERSTANDING something from RECOMMENDING it. You are confusing the two precisely because you don’t separate them. It is perfectly possible to discuss Austrian economics sufficiently to understand it without recommending that a policy maker follows its advice.<br /><br />Pluralists would point out that Austrian economics is an observable phenomenon which exists and has a following. Much of Thatcherism appeared to come from similar roots e.g. Hayek. Pluralists would also argue that the prime role of the economist is to describe that phenomenon and to understand it including pointing out its limitations. Economists seem to think that their role is to judge Austrian economics and then to exclude it from further discussion if they personally don’t approve of it.<br /><br />In my earlier post I mentioned four schools of thought: New Keynesian, Post Keynesian, Market Monetarist and Austrian. If you did even a basic analysis of these you would see that three of these recommend stimulus and one does not. Already the Austrians are an outlier. The other three split by the types of stimulus they recommend. The two Keynesian schools also split by the way they describe the world and the importance they place on a realistic description.<br /><br />The problem here is that most economists have misunderstood what the rest of us require of them.<br /><br />Policy makers want economists to provide them with sufficient advice to help the policy maker make a decision. ‘Advisers advise ministers decide’ is pretty much the only thing that all politicians would agree on. Many of your arguments suggest that you think that economists should decide and politicians should simply act as spokespeople for the decisions of the economists. <br /><br />Non-economists want economists to educate us about different economic schools of thought, including the ones that don’t work. Imagine if historians decided to exclude Soviet Communism from their syllabus because it didn’t work. Including things that don’t work is essential even if it’s just to ensure that they don’t happen again.<br /><br />Students want a pluralist education for the same reasons that non-economists want one. The main differences are that students want a more advanced education than non-economists and that students now expect their quality expectations to be met as they are paying directly for their education.<br /><br />The question “What are academics good for” is a good one. It’s not just you who is asking the question though. The purpose of academic economists is to educate the rest of us, not to tell us what to do. If the rest of us don’t understand economics sufficiently then who fault is it if not the educators? Jamienoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-56151995175676349212014-08-01T13:38:58.904+00:002014-08-01T13:38:58.904+00:00Its a good question, but I have a good answer. Som...Its a good question, but I have a good answer. Sometimes intuition can be wrong, and you need to do the maths to check it out. DSGE is just maths with parameters. An example. My intuition was that fiscal policy would dominate unconventional monetary policy of the Woodford forward commitment type, because the latter involved promising higher future output and inflation. The analysis I discussed here<br />http://mainlymacro.blogspot.co.uk/2013/12/werning-on-liquidity-trap-policy.html<br />showed I might be wrong. <br /><br />So I would turn the question around. What exactly is so objectionable about using a DSGE model?Mainly Macrohttps://www.blogger.com/profile/09984575852247982901noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-30233982201444595572014-08-01T13:16:09.653+00:002014-08-01T13:16:09.653+00:00You are conflating "you cannot model every as...You are conflating "you cannot model every aspect of the economy perfectly" and "DSGE does not model the economy as a whole adequately". The idea you need Acemoglu-like knowledge of each sub field to understand hat's going on at a macro level is just a relic of economics' obsession with reductionism.<br /><br />But anyway, you both seem to agree about DSGE to a degree, so I won't argue too much. Simon, it's all well and good to say macroeconomists know a few key observations and stylised facts about the economy, but my question then becomes why exactly the more complex models are needed and indeed used by central banks. Why not just stick with a few principles, evidence, ethics and intuition?Unlearningeconhttps://www.blogger.com/profile/13687413107325575532noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-62817594750212293042014-08-01T08:17:17.495+00:002014-08-01T08:17:17.495+00:00Of course given that you made the claim, it ought ...Of course given that you made the claim, it ought to really be you who should 'google it' and then provide the link. If only to deter (slightly?) people from making false claims to fit their prejudices...or even from making false accusations of 'cherry-picking'?Simonhttps://www.blogger.com/profile/01453060744510427275noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-36970003786754220982014-07-31T21:50:51.013+00:002014-07-31T21:50:51.013+00:00"A survey of US academic economists, which fo..."A survey of US academic economists, which found that 36 thought the Obama fiscal stimulus reduced unemployment and only one thought otherwise, led to this cri de coeur from Paul Krugman. What is the point in having academic research if it is ignored, he asked? At the same time I was involved in a conversation on twitter, where the person I was tweeting with asked<br /><br /><br />“What I have never understood is what is so great about academic economists? Certainly not more objective.”"<br /><br />If I remembering correctly, Krugman said banks can't create checks out of thin air. Let's assume he means demand deposits. Is that correct or not?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-88604508497608998242014-07-31T19:58:24.431+00:002014-07-31T19:58:24.431+00:00The consensus I talk about here is that fiscal sti...The consensus I talk about here is that fiscal stimulus reduces unemployment. So calls for pluralism in this context is that we should instead listen to Austrians who say it has no effect?Mainly Macrohttps://www.blogger.com/profile/09984575852247982901noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-91488135221860932222014-07-31T19:19:42.419+00:002014-07-31T19:19:42.419+00:00Understand the difference between consensus on mon...Understand the difference between consensus on monetary policy, and consensus on financial regulation. The former, which the paper you refer to describes, still holds.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-42394147941427738632014-07-31T17:59:47.604+00:002014-07-31T17:59:47.604+00:00When economists say there is a consensus. Like the...When economists say there is a consensus. Like they did here in Nov 2007.<br /><br />http://www.nber.org/papers/w13580<br /><br />It is time to run for cover. That monetary policy consensus was like the 1990s Washington Consensus. A lot of the problems really came down to mathematical rigour trumping widely and deeply informed analysis.<br /><br />Right now pluralism, not consensus, is what is needed in macroeconomics.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-38808077436516591612014-07-31T17:15:10.062+00:002014-07-31T17:15:10.062+00:00What's disturbing is that conservatives haven&...What's disturbing is that conservatives haven't learned anything. Policymakers listened to macro when they wanted to stop the crisis and turn things around. Then they stopped listening and turned to austerity. The problem isn't macro, it's the policymakers.<br />Peterhttps://www.blogger.com/profile/08272747870634233567noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-9434113987834874042014-07-31T15:41:02.779+00:002014-07-31T15:41:02.779+00:00For the record, Apple didn't invent any of the...For the record, Apple didn't invent any of the technology in their products. They packaged the stuff brilliantly, however.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-26011044914477760902014-07-31T15:37:43.514+00:002014-07-31T15:37:43.514+00:00This post is disturbing. We are starting to see a ...This post is disturbing. We are starting to see a return to the hubris we saw before 2008. No doubt this comfortable and congenial clique thinks that macroeconomics is "in pretty good shape".Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-37232819790414752892014-07-31T14:54:48.966+00:002014-07-31T14:54:48.966+00:00Basically agree with Wren-Lewis and Krugman. The b...Basically agree with Wren-Lewis and Krugman. The blog post mentions climate science and the problem there as with economics is that the science is facing resistance from money and ideology (anti-government, anti- democratic ideology.)<br /><br />Another analogous case in the U.S. is immunizations. Immunizations have been so successful at preventing outbreaks, that people have begun to forget about the dangers of outbreaks and doubt the efficacy or science of immunizations. So these diseases are making a comeback. Same with depressions and economics.<br /><br />The issue of UK austerity could be a matter of degrees. See this Beckworth post for the analogous US situation:<br /><br />http://macromarketmusings.blogspot.com/2014/07/revisiting-great-experiment-of-2013.html<br /><br />The UK economy would be doing even better if not for fiscal austerity. Same with the U.S. economy. Policymakers wouldn't have had to lean so much on monetary policy and QE, the danger now being that the next recession or financial crisis will hit with rates already near the ZLB. Journalists should be able to understand that. But then again many are paid not to.<br /><br />At the Financial Times, I like Gillian Tett, Gavyn Davies, Martin Wolf and FT Alphaville. Chris Giles not so much. His hatchet job on Piketty was a joke. <br /><br />And the FT had this interesting story where the Bundesbank is finally listening to the consensus of economists:<br /><br />http://www.ft.com/intl/cms/s/0/656ff1f6-10ec-11e4-94f3-00144feabdc0.html?siteedition=intl#axzz38rhjvL64<br /><br />"The Bundesbank has backed the push by Germany’s trade unions for inflation-busting wage settlements, in a remarkable shift in stance from a central bank famed for its tough approach to keeping prices in check.<br /><br />Jens Ulbrich, the Bundesbank’s chief economist, told Spiegel, a German weekly, that recently agreed pay rises of more than 3 per cent were welcome, despite being above the European Central Bank’s inflation target of below but close to 2 per cent."<br /><br />9 times out of 10, "Anonymous" has the worst comments.<br />Peterhttps://www.blogger.com/profile/08272747870634233567noreply@blogger.com