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Please also be aware that by reading pundits like Noah Smith, you are buying into what is basically a historical fanfic of economics "schools" fighting fiercly

by zwaps 8y ago

Please also be aware that by reading pundits like Noah Smith, you are buying into what is basically a historical fanfic of economics "schools" fighting fiercly over who is right. This sells a lot of articles, but it doesn't really reflect academia (if it ever did). The god to honest truth is that macroeconomics in aggregated form is an undertaking based on extremely scarce data, and it always was. Traditional statistical inference invariable fails if you basically only do observational studies where you observe everything once, more or less. This is also why these grand theories have fallen out of style, except of course for those vocal pundits like Noah Smith, who literally has a job because he conjures up debates on political economy. The gold standard in todays Macroeconomics are either some variation of VAR models, more or less assumptionless vector-autoregressions of whatever flavor, or more structural DSGEs, who are fine-tuned to explain certain mechanisms but are arguably incomplete as models. Neither of these models are Keynesian, or Austrian, or monetarist, or whatever. It is also wrong that the mainstream is some sort of monolithic entity. The biggest econ association in Germany is trying to engage "heterodox" scholars, inviting them to conferences and such. Several universities keep clusters for agent-based models, complexity research and even econphysics. The research output, however, has been a bit lacking as of yet. In Paris, there is an active community of "Post-Keynesians" right in the top-7 econ university in the world. I know that figures like Prof. Keen are invited regularly. In contrast, it seems to be in the interest of some heterodox scholars to conjure up a hostile "mainstream theory" and then refrain from actually engaging with it in academic channels. The same is true for those pundits going on about Keynesians vs. Chicago boys in this day and age. Insofar that academic discussions did occur, they have been extremely productive imo. Well I am not an Macroeconomist but there you go.

TheCowboy 8y ago
I agree that the headline and tone of this article are engaging in unnecessary hyperbole, but this description of Noah Smith's views and arguments are not consistent with what I've read. I don't see him arguing for a Grand Theories perspective of economics, and he grounds his arguments in empirical evidence and is vocal about the need to do this. I also think you have contrived an exaggerated view, attributed it to him, and are arguing against that. I'd like to see more quotes to back up your argument because it is difficult to find it persuasive. Doing a quick search I found an older blog post where he touches on a lot of the same points that you just did, so maybe you agree with him more than you think: http://noahpinionblog.blogspot.com/2013/04/the-reason-macroeconomics-doesnt-work.html http://noahpinionblog.blogspot.com/2013/04/the-reason-macroe...
- zwaps 8y ago
  You are probably correct that I am not really reasonable in singling out Noah. I apologize for being wrong here. It's just that he is front and center in in this econ-blog industry that has been often unhelpful in making people with ideas engage the literature in an academic context, which (in other areas) I am a bit bitter about. I am sure he is a nice guy personally, and switching from his AP position without actually doing research to Bloomberg was probably putting more bread on the table, but still, the whole WAY the debate about economics is lead in the public has been stinted away from scientific context toward hostility and tribe mentality, and I do believe he is partly to blame for that.
zwaps 8y ago
But don't get me wrong, I am not defending current Macro. It has been extremely cool&good that everyone, including economists, now believes that the top-of-the-line models are basically garbage and economists are idiots. It means that people actually doing econ now are rather humble about what they do, and still have to be extremely technical and smart. Indeed, if you bring in a new theory that works, you'll probably be famous very quickly. The bar is pretty high though, your model gotta be inferential and parameters causally identified, while still fitting the data well. Nevertheless, my macroeconomist buddies got _really_ excited about doing "that machine learning" pretty much years before other fields were even talking about it (until they found out they basically use the same models already), because everyone is looking for the next big idea all the time. It's exactly the sort of old-style economists who can explain everything with their always-correct theories and basic math and then claim deference by everyone, who don't really have a place anymore - except writing articles for certain business newspapers, that is. Anyway econ sucks, continue please.

by zwaps 8y ago

TheCowboy 8y ago

I agree that the headline and tone of this article are engaging in unnecessary hyperbole, but this description of Noah Smith's views and arguments are not consistent with what I've read. I don't see him arguing for a Grand Theories perspective of economics, and he grounds his arguments in empirical evidence and is vocal about the need to do this. I also think you have contrived an exaggerated view, attributed it to him, and are arguing against that. I'd like to see more quotes to back up your argument because it is difficult to find it persuasive. Doing a quick search I found an older blog post where he touches on a lot of the same points that you just did, so maybe you agree with him more than you think: http://noahpinionblog.blogspot.com/2013/04/the-reason-macroeconomics-doesnt-work.html http://noahpinionblog.blogspot.com/2013/04/the-reason-macroe...

zwaps 8y ago
You are probably correct that I am not really reasonable in singling out Noah. I apologize for being wrong here. It's just that he is front and center in in this econ-blog industry that has been often unhelpful in making people with ideas engage the literature in an academic context, which (in other areas) I am a bit bitter about. I am sure he is a nice guy personally, and switching from his AP position without actually doing research to Bloomberg was probably putting more bread on the table, but still, the whole WAY the debate about economics is lead in the public has been stinted away from scientific context toward hostility and tribe mentality, and I do believe he is partly to blame for that.

zwaps 8y ago

But don't get me wrong, I am not defending current Macro. It has been extremely cool&good that everyone, including economists, now believes that the top-of-the-line models are basically garbage and economists are idiots. It means that people actually doing econ now are rather humble about what they do, and still have to be extremely technical and smart. Indeed, if you bring in a new theory that works, you'll probably be famous very quickly. The bar is pretty high though, your model gotta be inferential and parameters causally identified, while still fitting the data well. Nevertheless, my macroeconomist buddies got _really_ excited about doing "that machine learning" pretty much years before other fields were even talking about it (until they found out they basically use the same models already), because everyone is looking for the next big idea all the time. It's exactly the sort of old-style economists who can explain everything with their always-correct theories and basic math and then claim deference by everyone, who don't really have a place anymore - except writing articles for certain business newspapers, that is. Anyway econ sucks, continue please.