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I am not a macroeconomist but I’ll defend them. Macro is hard. It’s really, really, really hard. It’s _really easy_ to write down a moderately realistic macr

I am not a macroeconomist but I’ll defend them. Macro is hard. It’s really, really, really hard. It’s _really easy_ to write down a moderately realistic macro model which you have absolutely no hope of ever solving numerically (an “extremely realistic model” would be even worse). That’s not going to do anyone any good. It would be a totally empty exercise: “here’s something which I bet would be great but we’ll never know!”. It’s impossible to confront such models with data, which is absolutely the bread and butter of any macro paper. It is still hard but somewhat less hard to write down a simplified model which you can solve and which can give you insights. By necessity you lose some realism in this exercise. There is no way around that. It’s not a lack of cleverness or imagination. It is possible to confront such models with data to make the whole exercise empirical, which credible macro is and must be. By necessity these insights might be useful or not depending on how much of the useful machinery of realism you dropped from your model to make it solvable. If you personally want something “better”, you are welcome to try. I encourage you! If you show that your method works - that it involves plausible assumptions, can be solved, and can be made empirical - the macroeconomists of the world will beat a path to your door and gladly study your methods. The exercise not a charade. There are currently no alternatives to mainstream empirical macro bc all of the purported alternatives are (for lack of a better word) complete BS (example: MMT).

dataflow 3y ago
> It’s not a lack of cleverness or imagination. I don't think that's the claim you're arguing against either. Rather, the argument seems to be that there is misplaced confidence in macroeconomic models. i.e. the people displeased by them would rather hear "I don't know" much more often from the modelers than they currently do.
- huitzitziltzin 3y ago
  I don’t know if you’re going to hear “I don’t know” in a lot of macro seminars - everyone there knows the same material as everyone else and what the limits are. But I think any macro scholar would tell you quite honestly where they think the limits of their models are. It’s like any other scientific endeavor: “this paper on Topic X is our best understanding right now but it’s subject to revisions.” Similar example from outside macro: there are not many finance professors who will make large bets on the prices of specific assets on the basis of their models, including models in which they have high confidence as being on the current research frontier. That certainly doesn’t mean they are idiots or that they aren’t trying or whatever. It just means it’s really hard. Imagine a physical science, but make it harder bc you generally cannot do controlled macro experiments (sometimes there are natural experiments if you are very lucky) you can certainly never repeat them AND when your experimental subjects discover that you are trying to predict or understand their behavior they might change it on purpose bc they don’t want to be understood or predicted! In several ways it’s a lot harder than physics! Murray gell-man said something to that effect once. Something like “imagine how hard physics would be if electrons could think.”
jampekka 3y ago
At least stop calling it a science if you can't make testable predictions. And especially stop pretending that the neoliberal policy is based on anything resembling science. How is MMT any more bullshit than the mainstream that fails constantly?
- MrRolleyes 3y ago
  [dead]
- huitzitziltzin 3y ago
  Testable predictions are part of the game. Helpful explanations are another. (Philosophy of science has moved on since Popper!) MMT is bullshit. Total and complete bullshit. That’s a bigger topic than I have time or space for. You can’t even get those clowns to commit to anything their theory implies at all! Every time an obvious objection is raised they say “oh well that’s not what we mean!” Yeah ok so tell us what you DO mean. Sorry but MMT is extremely frustrating. It’s not even playing the same game as normal macro. It as as much a “competitor” to standard macro as astrology is to astronomy. Like astrology, it has essentially nothing to do with reality.
  - deleted 3y ago
    [deleted]
  - jampekka 3y ago
    Continuing along your style of argumentation, mainstream macro, and most other economics, is to economomy what the clergy was to feudal rule. That's probably also its main epistemological justification. Very helpful for few indeed. And strayed quite a bit from Popper.
thrtythreeforty 3y ago
What makes those models difficult to solve? Where can I read about such a model? It seems plausible that something would be computationally intractable; it seems less plausible that you couldn't do any modeling at all.
- huitzitziltzin 3y ago
  It’s not that you can’t do any modeling at all - that’s definitely not the point I was trying to convey. It’s hard and you have to simplify. That simplicity has a benefit (tractability) and a cost (there is inevitably less realism). If you want to learn more, you are spoiled for choice. There are lots of places to look. Here’s a random list from the top of my head right now. Ljungqvist and Sargent’s Recursive Macroeconomic Theory is a standard grad level text taught nearly everywhere. Has been for probably 20 years. Stokey, Lucas and Prescott is another, more math methods focused. DeJong and Dave is a macro empirics book. Jianjun Miao’s book is another solid option. Stachurski focuses on computational methods. Acemoglu has a book on modern growth theory. McCandless “the abcs of rbcs” is IMO underappreciated. Beyond this you’ll need chapters from various volumes of the Handbook of Macro and related texts. There’s a long one by Fernandez-villaverde and co-authors about modern DSGE models. That’s available for free on his website I think. It’s a huge literature. If you are serious about it, enjoy and good luck!

dataflow 3y ago

> It’s not a lack of cleverness or imagination. I don't think that's the claim you're arguing against either. Rather, the argument seems to be that there is misplaced confidence in macroeconomic models. i.e. the people displeased by them would rather hear "I don't know" much more often from the modelers than they currently do.

huitzitziltzin 3y ago
I don’t know if you’re going to hear “I don’t know” in a lot of macro seminars - everyone there knows the same material as everyone else and what the limits are. But I think any macro scholar would tell you quite honestly where they think the limits of their models are. It’s like any other scientific endeavor: “this paper on Topic X is our best understanding right now but it’s subject to revisions.” Similar example from outside macro: there are not many finance professors who will make large bets on the prices of specific assets on the basis of their models, including models in which they have high confidence as being on the current research frontier. That certainly doesn’t mean they are idiots or that they aren’t trying or whatever. It just means it’s really hard. Imagine a physical science, but make it harder bc you generally cannot do controlled macro experiments (sometimes there are natural experiments if you are very lucky) you can certainly never repeat them AND when your experimental subjects discover that you are trying to predict or understand their behavior they might change it on purpose bc they don’t want to be understood or predicted! In several ways it’s a lot harder than physics! Murray gell-man said something to that effect once. Something like “imagine how hard physics would be if electrons could think.”

jampekka 3y ago

At least stop calling it a science if you can't make testable predictions. And especially stop pretending that the neoliberal policy is based on anything resembling science. How is MMT any more bullshit than the mainstream that fails constantly?

MrRolleyes 3y ago
[dead]
huitzitziltzin 3y ago
Testable predictions are part of the game. Helpful explanations are another. (Philosophy of science has moved on since Popper!) MMT is bullshit. Total and complete bullshit. That’s a bigger topic than I have time or space for. You can’t even get those clowns to commit to anything their theory implies at all! Every time an obvious objection is raised they say “oh well that’s not what we mean!” Yeah ok so tell us what you DO mean. Sorry but MMT is extremely frustrating. It’s not even playing the same game as normal macro. It as as much a “competitor” to standard macro as astrology is to astronomy. Like astrology, it has essentially nothing to do with reality.
- deleted 3y ago
  [deleted]
- jampekka 3y ago
  Continuing along your style of argumentation, mainstream macro, and most other economics, is to economomy what the clergy was to feudal rule. That's probably also its main epistemological justification. Very helpful for few indeed. And strayed quite a bit from Popper.

thrtythreeforty 3y ago

What makes those models difficult to solve? Where can I read about such a model? It seems plausible that something would be computationally intractable; it seems less plausible that you couldn't do any modeling at all.

huitzitziltzin 3y ago
It’s not that you can’t do any modeling at all - that’s definitely not the point I was trying to convey. It’s hard and you have to simplify. That simplicity has a benefit (tractability) and a cost (there is inevitably less realism). If you want to learn more, you are spoiled for choice. There are lots of places to look. Here’s a random list from the top of my head right now. Ljungqvist and Sargent’s Recursive Macroeconomic Theory is a standard grad level text taught nearly everywhere. Has been for probably 20 years. Stokey, Lucas and Prescott is another, more math methods focused. DeJong and Dave is a macro empirics book. Jianjun Miao’s book is another solid option. Stachurski focuses on computational methods. Acemoglu has a book on modern growth theory. McCandless “the abcs of rbcs” is IMO underappreciated. Beyond this you’ll need chapters from various volumes of the Handbook of Macro and related texts. There’s a long one by Fernandez-villaverde and co-authors about modern DSGE models. That’s available for free on his website I think. It’s a huge literature. If you are serious about it, enjoy and good luck!