tag:blogger.com,1999:blog-2546602206734889307.post723714124945158605..comments2024-03-28T04:29:22.717+00:00Comments on mainly macro: Anti-intellectualismMainly Macrohttp://www.blogger.com/profile/09984575852247982901noreply@blogger.comBlogger47125tag:blogger.com,1999:blog-2546602206734889307.post-85286949063730517492014-08-14T10:35:00.694+00:002014-08-14T10:35:00.694+00:00If you think that the micro-foundations of macro a...If you think that the micro-foundations of macro and REH are a realistic depiction of human behaviour and a good foundation for understanding how the world works, you need to be able to defend it in front of a psychologist and others who may have a very different explanation of how people behave and probably based on a lot of years of building up evidence and accumulated knowledge to get there. <br /><br />You must be open to criticism to people with different views. There must be a diversity of views in a subject like economics. There is no point in having a coherent model or standardised model if it is wrong or indefensible. It is the wrong starting point for analysis. The right starting point is to tread carefully and consider as much evidence (including from people in other fields) and different ways of looking at a problem as is possible.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-24065246219863640982014-08-11T11:20:32.272+00:002014-08-11T11:20:32.272+00:00I love the latest post quoting Cabellero on Lars S...I love the latest post quoting Cabellero on Lars Syll's blog.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-91369329487200428362014-08-07T20:19:48.658+00:002014-08-07T20:19:48.658+00:00The MP did not say these academics fail to take ac...The MP did not say these academics fail to take account of political realities. Instead they implied that academic research was somehow unrealistic or impractical. They then followed it up with a statement - "as someone who has worked in a sector where you have to earn money before you can spend it." - which makes no sense on any level. This has absolutely nothing to do with parliamentary democracy, and everything to do with wanting to ignore what academic economists say.<br /><br />Would you equally defend MPs who ignore evidence of climate change, or who advocate using astrology in healthcare?Mainly Macrohttps://www.blogger.com/profile/09984575852247982901noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-68196118098568129692014-08-07T19:21:30.949+00:002014-08-07T19:21:30.949+00:00No, I don't think that 100+ years of research ...No, I don't think that 100+ years of research on economics counts for nothing. I didn't say that - why do you pretend I did? But by the same token you seem to think that 100+ years of accumulated experience of parliamentary democracy count for nothing, at least as far as the MP you cite is concerned.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-34770171992481183522014-08-07T01:26:39.314+00:002014-08-07T01:26:39.314+00:00Notice that data comes first:http://feedproxy.goog...Notice that data comes first:http://feedproxy.google.com/~r/Understandingsociety/~3/ukJHC5yLc5I/what-is-methodology.htmlThornton Hallhttps://www.blogger.com/profile/11402495641975262697noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-62538578089518901862014-08-06T19:34:04.217+00:002014-08-06T19:34:04.217+00:00Microfoundations research at its best is just reso...Microfoundations research at its best is just resolving how models based on well establish microeconomic behaviour work out when you put all the pieces together. Having worked during my younger days on models which were much more data based, I know how much nonsense you can generate when you fail to do this. However I agree that there are big dangers with this approach, which is what I have written many posts discussing e.g. <br />http://mainlymacro.blogspot.co.uk/2012/08/arguments-for-ending-microfoundations.html<br />Mainly Macrohttps://www.blogger.com/profile/09984575852247982901noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-53688873945699034262014-08-06T19:28:57.533+00:002014-08-06T19:28:57.533+00:00I think your reaction illustrates exactly the poin...I think your reaction illustrates exactly the point I am making. If we were talking about an established physical science, would you take this point of view? If not, why do you value 100+ years of research on some physical science, but think that 100+ years of research on economics counts for nothing? Mainly Macrohttps://www.blogger.com/profile/09984575852247982901noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-75195456252014938832014-08-06T17:39:11.444+00:002014-08-06T17:39:11.444+00:00Simon, I'd like to pick you up on one point (t...Simon, I'd like to pick you up on one point (though this debate is probably over). You say:<br />One area where academics typically have expertise relative to other people is on issues involving economic policy - for macroeconomics, for example, on issues involving monetary and fiscal policy. Issues like whether austerity is expansionary or contractionary. I took this for granted because academics spend a large amount of their time doing research on these issues. Much of this research involves assessing evidence. They do this in a highly competitive environment, constantly subject to peer review. In addition, they often compete for research grants, where the opinions of end users (like the Bank of England) can matter a lot.<br />But some of your recent posts on microfoundations, which I understand you to endorse as an approach, seem to say clearly that the value of a paper, at least within the profession, is nothing to do with the empirical realities and everything to do with the internal consistency of the argument. This worries me a lot because microfoundations (developed after my day, although we were beginning to talk about rational expectations) seems under these conditions to be well on the way to a hermetic branch of mathmatical logic. <br /><br />And it leaves economists having very little useful to say ("Says Law: all savings MUST be invested or spent; Price level depends on money supply - ignoring velocity - and so on. If economists justify their work on the purity of its foundations and not on its relevance to the real world, why should anyone - journalists, politicians, even central bankers - take any notice?DavidShttps://www.blogger.com/profile/11679346381085854499noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-6327507991637596832014-08-06T12:12:09.080+00:002014-08-06T12:12:09.080+00:00Such a Wiki, or a kind of IPCC report for economic...Such a Wiki, or a kind of IPCC report for economics describing what economists agree upon and what not, would be a great way for outsiders to understand the state of the art in economics.Victor Venemahttps://www.blogger.com/profile/02842816166712285801noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-91081223788744887852014-08-05T23:49:03.216+00:002014-08-05T23:49:03.216+00:00This really shouldn't take all these words, Th...This really shouldn't take all these words, Thoughtful. In science, you start with observations. Enough generate a pattern. You express that pattern in more general terms that generate conclusions that are not in the original data. You look for ways to check those conclusions and if they match the data, then you have a valid theory, for the time being. If not, you reject the theory. That's Popper in a nutshell, not the end of all debate, but a great basic outline.<br /><br />There is exactly one example of this process playing out in econ that I have seen mentioned in the bloggosphere: auction theory. It's as if all of physics amounted to a half decent theory of why objects fall instead of rise due to the Earth's gravity.Thornton Hallhttps://www.blogger.com/profile/11402495641975262697noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-91826353214851202652014-08-05T18:44:24.032+00:002014-08-05T18:44:24.032+00:00Your last point is completely incoherent because i...Your last point is completely incoherent because it describes the (sometimes expensive, sometimes slow) process by which science decides between right and wrong. Such a process cannot be described for econ. Hence my objection.Thornton Hallhttps://www.blogger.com/profile/11402495641975262697noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-64512279493822489752014-08-05T17:38:01.305+00:002014-08-05T17:38:01.305+00:00I do have a bit of a problem with this - academic ...I do have a bit of a problem with this - academic economist complains that academic economists aren't sufficiently respected. Well, you would say that, wouldn't you?<br /><br />And your remark that an MP noting that “You may come at this from an academic viewpoint - I come at it from a real world viewpoint"..."illustrates a damaging contempt for academic knowledge" surely in itself illustrates an equally damaging contempt on your part for political realities.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-76464931471754942212014-08-05T16:32:24.772+00:002014-08-05T16:32:24.772+00:00Agreed. You can generalize this point to any sphe...Agreed. You can generalize this point to any sphere of discourse. I am amused at how short memories are.Thoughtful07https://www.blogger.com/profile/16716231223315759717noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-36654322881058236832014-08-05T16:29:41.226+00:002014-08-05T16:29:41.226+00:00Degree of difficulty of determining the "corr...Degree of difficulty of determining the "correct" view of the world (or adjudicating among competing views) is unrelated to whether a field of study is "scientific". The evolution of physics from the Newtonian view to the Einsteinian view of the world took 200 years, during which period there were fiercely competitive views about many critical details of that theory. There are still competing views of gravity, black holes, the shape of space, the nature of atomic binding and other areas of physics. Mathematicians disagree, sometimes vehemently, about whether a claim is true and why. Determining the existence of the Higgs boson required the expenditure of several billion dollars and building one of the largest and probably the most sophisticated structures ever built. I'd say that the degree of difficulty of adjudicating between theories that predicted its existence and theories that did not or denied it was pretty difficult. Likewise, the struggle to adjudicate between Darwin's theory of evolution and Lamarck's theory was fierce, extended and, at the lay level, continues.<br /><br />Determining whether to blame the Great Depression, high unemployment and depressed wages on central bank policy or bad fiscal policy or some combination thereof may be difficult, but, it's not impossible and it can be scientific.Thoughtful07https://www.blogger.com/profile/16716231223315759717noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-2123586798053578422014-08-05T16:16:39.939+00:002014-08-05T16:16:39.939+00:00Jamie, no you can't, if your standards of reso...Jamie, no you can't, if your standards of resolution are too high for or don't apply to the particular domain of discourse. Economics (political science, sociology, too) is not a lab science. The standards of evidence, theory or hypothesis confirmation and disconfirmation and theory formation are different from those in, say, Physics or Chemistry. There are core similarities, for example, the behavior of aggregates differs from the behaviors of individuals (cats don't behave like cells, cells don't behave like electrons, and a stock's price may decrease as the market averages increase).<br /><br />I have never encountered "bitter" disputes between or among economists with differing points of view or policy recommendations. Yes, the field is competitive and this competition is fierce. But, it isn't ferocious. This competitiveness is healthy. Agreed, there are economic and career status consequences that are factors in its ferocity, but, for the most part, the debates - among academics - appear collegial.<br /><br />Now, the debates/discussions conducted in other forums - editorial pages of newspapers, magazines, blogs, speeches, the floor of the House or the Senate, a fundraiser, a private meeting, for example - may become bitter, personal or vicious, especially when a cultural or religious issue is introduced by one of the participants. However, in academic circles, one economist may charge another with being a "Market Monetarist", but no economist charges another with being a "fool" or "idiot".Thoughtful07https://www.blogger.com/profile/16716231223315759717noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-76081010052355706392014-08-05T15:49:48.617+00:002014-08-05T15:49:48.617+00:00I'd like to chime in here. The simple, albeit...I'd like to chime in here. The simple, albeit difficult, method of identification is to: 1) Learn economic principles (SWL suggested a book; there are several others) and the canonical examples that clarify their application; 2) use other sources of theory to learn the various widely-held positions on given issues and theories (e. g., the theory of marginal productivity, the notion of a perfectly competitive market, information asymmetry, looting, market rigging, monetary theory - of current interest is the notion of the Zero Lower Bound/Liquidity Trap - among them); 3) find reliable, free sources of data to compare with the data cited by economists or to confirm or disconfirm theory claims by economists, politicians, institutions (the CBO, say, or Cato Institute or Brookings Institution) and journalists; 4) develop at least an outline or overview of the histories of economics and markets in your country, at least, and, possible, other parts of the world; and 5) take the time to think things through for yourself - a good technique is "the five whys". When someone offers an opinion, ask why they believe it's true or applies to the case in question (or both); then, ask why that explanation appears true to them, and so on. In many instances, the second why stumps us; in most instances, the third why stumps us. If you are reading rather than conversing, ask yourself why (or how) claim _______ could be accurate or recommendation _______ should be fruitful. Then ask why (or how) your explanations of that claim could support it. Don't restrict your "whys" to data, evidence or theory. Look at other motives for making that claim (religion, some sort of self interest that might trump an interest in truth, accuracy or efficacy?). This process will help you make your initial ideas specific and will lead to other questions, other evidence, other data, other opinions and, perhaps to a resolution of your doubts.<br /><br />Two more places to start: online courses given free through Coursera.org and EdX.org. In these courses, you determine the extent of your participation - they make no demands, yet offer good opportunities to take courses from first-rate teachers employed by first-rate universities and colleges (Harvard, Princeton, UC Berkeley, UT Austin, Duke, Penn, Cornell, U Wisconsin, Ecole Normal in Paris, other European and Asian schools). The Penn course in single variable calculus on Coursera is among the best first-second-year courses I've ever seen (for engineers and applied mathematicians, not for those interested in pure maths). Antonio Rangel's "Econ for Scientists" via EdX and Robert Schiller's "Financial Markets" and "Principles of Economics are excellent (for a different point of view, John Taylor teaches a "principles" course on Stanford Online, too; there's even a course on "evaluating macro policy" on Coursera, which actually would a great place to start when it's next offered), as are several other econ courses and econ history courses on both "channels". Many of the lectures are available on YouTube and through iTunes University (iTunes store).<br /><br />For me, this process takes some time and effort. I have read in excess of 10,000 pages of economics, excluding blogs, during the previous 4 years and have learned to use Eurostat, the St. Louis Fed Economic Database (FRED) in Excel (they have a 'way cool add-in), the OECD and the High Incomes database among others. Before these databases were available freely, I subscribed to the Economy.com service until they were acquired by Standard & Poors (the price went up beyond what I could justify).<br /><br />I'm a little obsessive. You don't have to go this far to understand current economic issues well enough to vote or correspond/converse with representatives, friends, bloggers, etc. thoughtfully. But, opportunities for growth are plentiful. Time, effort and desire are the only prerequisites.Thoughtful07https://www.blogger.com/profile/16716231223315759717noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-10904562067135289802014-08-05T12:42:20.255+00:002014-08-05T12:42:20.255+00:00who says the phrase "social science" can...who says the phrase "social science" cannot be applied to fields where it is difficult to choose between competing explanations?Luis Enriquehttps://www.blogger.com/profile/09373244720653497312noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-14796049780626315012014-08-05T01:20:33.208+00:002014-08-05T01:20:33.208+00:00If you can't answer this question, then you ca...If you can't answer this question, then you can't even claim to be a "social science" let alone science.<br /><br />PK is actually creeping up on realizing this. When he quotes Colbert saying "Reality has a well known liberal bias" he's actually telling you why his macro advice tends to be correct.Thornton Hallhttps://www.blogger.com/profile/11402495641975262697noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-50611099967329301422014-08-04T22:27:45.984+00:002014-08-04T22:27:45.984+00:00I am not an economist but have become interested i...I am not an economist but have become interested in economics after the start of this crisis. I read your blog sometimes, and I was very interested by your book advice here. So I looked at the book reviews on Amazon. In a very negative review (one star, by "helpful reviewer"), I read this argument:<br /><br /> "Most damningly though he seems to have missed the latest research into money creation and continues the myth that central banks and governments control the money supply rather than private banks which create the vast majority of money in the economy. He admits that mainstream economics may have failed to properly consider the role of banking in their models but goes no further than that."<br /><br />Isn't this talking about the "money multiplier" theory which you have been critical about? Is that topic a weakness of Tim Harford's book, or am I totally confused ?<br /><br />I have also tried to read Wikipedia on such topics as the "money multiplier", but couldn't trust it, or understand it, or both. It would be great if academic economists could maintain a wiki site which would record their agreements and disagreements on all questions of interest to politicians and citizens alike. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-1029541071588720322014-08-04T20:04:47.522+00:002014-08-04T20:04:47.522+00:00what kind of answer could you hope for here?
in p...what kind of answer could you hope for here?<br /><br />in practise you have to judge which answers sound most plausible, where the evidence looks stronger, and canvas opinion widely to get an idea of the reputation of the economist giving the answer.<br /><br />it's not reliable, but what else could you hope for? A light shining down from heaven?<br /><br />we are talking about a field of endeavour where even the best economists disagree and get things wrong, so hoping for somebody to reliably point to the truth is asking too much. Luis Enriquehttps://www.blogger.com/profile/09373244720653497312noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-41396413167190406462014-08-04T18:25:38.973+00:002014-08-04T18:25:38.973+00:00No matter how often I ask, how does a layperson or...No matter how often I ask, how does a layperson or policy maker identify the good econ and ignore the bad, no one answers. They general ignore the question, even though it is the only one that matters at all.Thornton Hallhttps://www.blogger.com/profile/11402495641975262697noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-24000454749505921602014-08-04T15:45:43.132+00:002014-08-04T15:45:43.132+00:00Anonymous: “I love this - exactly what academics a...Anonymous: “I love this - exactly what academics are criticized for doing when they supposedly retreat into their ivory towers”<br /><br />I can’t win! My comment about not posting further relates both to the title of this post “Anti-intellectualism” and “It serves me right of course. What I got almost universally in comments was a discussion of all things wrong with academic economists. Even the estimable Chris Dillow joined in”. I have no desire to post where my comments are unwanted but would happily debate if I thought my views were welcome.<br /><br />I suspect that economists and non-economists want to ask and answer different questions. I deliberately read a range of blogs by economists who have different views. Many of my questions are about the differences between economists and how to determine who has the better argument. <br /><br />Economist A will say “only monetary policy will work – fiscal policy will fail” while economist B will say “only fiscal policy will work – monetary policy will fail”. At least one of them is wrong but how do I decide which?<br /><br />Economist A will say that New Keynesianism is the heir to Keynes while economist B will say that Post Keynesianism is heir to Keynes. However, they are very different and the associated economists have very low opinions of each other. I remember a specific very bad tempered debate between Paul Krugman and Steve Keen. It generated much heat and no light. Afterwards, by reading the two economists’ blogs, I found that not only do they both cite Keynes as an influence but also Hyman Minsky and James Tobin. For a non-economist there are some obvious questions. What is going on here? Why did the two strands of Keynesianism split? Why is it so bitter? Does it matter from a policy perspective?<br /><br />When you read a range of blogs you also realise that economists have different definitions of even the most basic concepts such as money and banks. Which definitions should a non-economist use? Does it matter? How does a non-economist know which definitions an economist is using when he doesn’t make it clear? It is also obvious that economists use different mental models. However, these mental models are never articulated clearly. Hence, the non-economist has to try to work out what these mental models might be to attempt to reconcile opposing views.<br /><br />Another set of questions arises from the different perspectives of economists and non-economists relating to aspects of the economy with which the non-economist is familiar. I spent 30 years in business and government. On no occasion in that time did anyone talk about the demand and supply curves which appear to form the basis of economics textbooks. Why is this? I have a view. However, it is impossible to discuss this with an economist as the economist assumes that only his perspective is valid.<br /><br />I see that Chris Dillow has a post suggesting a role of “professor for the public understanding of economics”. My feeling is that the Internet will fill this gap more effectively than an academic as it will provide much greater choice. However, Chris’s heart is in the right place in suggesting the role.Jamienoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-35819283561851210892014-08-04T14:26:10.994+00:002014-08-04T14:26:10.994+00:00"I won't post again. I suspect that our p..."I won't post again. I suspect that our perspectives are too far apart for useful debate." <br /><br />I love this - exactly what academics are criticized for doing when they supposedly retreat into their ivory towers.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-66587829277094179182014-08-04T13:38:02.899+00:002014-08-04T13:38:02.899+00:00On your first question, I hardly think city econom...On your first question, I hardly think city economists or business leaders would have been arguing against financial deregulation. What might have made a difference in terms of education was a greater focus on economic history, and thereby financial crises in the past. Mainly Macrohttps://www.blogger.com/profile/09984575852247982901noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-65243967631766736602014-08-04T13:32:24.553+00:002014-08-04T13:32:24.553+00:00"when you are not prepared to engage with non..."when you are not prepared to engage with non-economists who want to learn about economics" <br /><br />What did I do to deserve that?Mainly Macrohttps://www.blogger.com/profile/09984575852247982901noreply@blogger.com