4 ms·

I prefer Cochrane's critique as well. Krugman is one of the most overrated economists of our time IMO.

by jfornear 17y ago

jshen 17y ago
except for the economists who got it so wrong ;)
- DanielBMarkham 17y ago
  You are assuming that economists operate like weather prediction. This is not the case. Your assumption is invalid. Look at it this way: if economists could predict the markets, economists would all be filthy rich. Markets are inherently chaotic. That's why they work.
  - jshen 17y ago
    yet economists do make predictions, and they make them based on abstract models. Read the krugman piece for some examples of such models and their predictions. One concrete example, when the fed raises or lowers interests rates it's based on a prediction of where they believe the market is going, where they believe it's at, and a prediction of the effect of the rate change. Otherwise what is the profession doing?
    - DanielBMarkham 17y ago
      The profession is still in the stage of gathering data and looking for patterns. Some theorists believe they have testable hypotheses, but this is debatable (in my opinion) The Fed makes forecasts but monetary policy is based on consensus among various schools of thought, not models. It doesn't work like NOAA. If you could reliably predict the markets you'd make a fortune -- and the markets would adjust and become unpredictable again. This is a basic feature of markets, agreed to by all comers, last I checked. IANAE, but I'm hearing over and over again that Krugman is making political points, not economic ones. That's fine, but it makes it difficult for laymen like myself to determine if we're having a political discussion or an economic one.
      - howardr 17y ago
        That's a very good point. That is the feeling I have been getting during that past year from Krugman when I started reading his columns. I wanted to read him because of his reputation as an economist, but it is almost like he is parlaying that to push his political agenda.
      - jshen 17y ago
        I'm getting the sense that you haven't really read krugman. For starters, if you did read him on the NYT then you couldn't have missed the giant OPINION label at the top. It's an op-ed, it isn't claiming to be anything else. Second, if you read the article in question he specifically talks about this particular school of economists using rigorous mathematical models, and the problems he has with those models (in laymans terms). Did you miss that part or did you not read the article in question?
lil_cain 17y ago
Depends. Krugman's actual economics has been brilliant, for the most part. The problem is no one knows him for his economics. People know him for his New York Times column, and the two are only very tangentially related.
- jfornear 17y ago
  I mean, I took an international trade theory class that was dedicated to Krugman's work... I know he is only popular because of his NYT blog, which, for the most part, seems to only exist to bolster liberal political initiatives, and, to clarify, that is why I think he is overrated.
  - deleted 17y ago
    [deleted]
chasingsparks 17y ago
Depends. Krugman's actual economics has been brilliant, for the most part. The problem is no one knows him for his economics. People know him for his New York Times column, and the two are only very tangentially related. (For some reason, I had no reply button on lil_cain's comment). Cochrane even notes that Krugman's actual econ work was brilliant. I'm old enough to remember when Krugman was young, working out the interactions of game theory and increasing returns in international trade for which he won the Nobel Prize...He once wrote eloquently about how only math keeps your ideas straight in economics." I would agree with lil_cain -- Krugman's econ work was brilliant -- while point out that Cochrane's critique was largely that Krugman is no longer practicing economics.

I prefer Cochrane's critique as well. Krugman is one of the most overrated economists of our time IMO.

jshen 17y ago

except for the economists who got it so wrong ;)

DanielBMarkham 17y ago
You are assuming that economists operate like weather prediction. This is not the case. Your assumption is invalid. Look at it this way: if economists could predict the markets, economists would all be filthy rich. Markets are inherently chaotic. That's why they work.
- jshen 17y ago
  yet economists do make predictions, and they make them based on abstract models. Read the krugman piece for some examples of such models and their predictions. One concrete example, when the fed raises or lowers interests rates it's based on a prediction of where they believe the market is going, where they believe it's at, and a prediction of the effect of the rate change. Otherwise what is the profession doing?
  - DanielBMarkham 17y ago
    The profession is still in the stage of gathering data and looking for patterns. Some theorists believe they have testable hypotheses, but this is debatable (in my opinion) The Fed makes forecasts but monetary policy is based on consensus among various schools of thought, not models. It doesn't work like NOAA. If you could reliably predict the markets you'd make a fortune -- and the markets would adjust and become unpredictable again. This is a basic feature of markets, agreed to by all comers, last I checked. IANAE, but I'm hearing over and over again that Krugman is making political points, not economic ones. That's fine, but it makes it difficult for laymen like myself to determine if we're having a political discussion or an economic one.
    - howardr 17y ago
      That's a very good point. That is the feeling I have been getting during that past year from Krugman when I started reading his columns. I wanted to read him because of his reputation as an economist, but it is almost like he is parlaying that to push his political agenda.
    - jshen 17y ago
      I'm getting the sense that you haven't really read krugman. For starters, if you did read him on the NYT then you couldn't have missed the giant OPINION label at the top. It's an op-ed, it isn't claiming to be anything else. Second, if you read the article in question he specifically talks about this particular school of economists using rigorous mathematical models, and the problems he has with those models (in laymans terms). Did you miss that part or did you not read the article in question?

lil_cain 17y ago

jfornear 17y ago
I mean, I took an international trade theory class that was dedicated to Krugman's work... I know he is only popular because of his NYT blog, which, for the most part, seems to only exist to bolster liberal political initiatives, and, to clarify, that is why I think he is overrated.
- deleted 17y ago
  [deleted]

chasingsparks 17y ago

Depends. Krugman's actual economics has been brilliant, for the most part. The problem is no one knows him for his economics. People know him for his New York Times column, and the two are only very tangentially related. (For some reason, I had no reply button on lil_cain's comment). Cochrane even notes that Krugman's actual econ work was brilliant. I'm old enough to remember when Krugman was young, working out the interactions of game theory and increasing returns in international trade for which he won the Nobel Prize...He once wrote eloquently about how only math keeps your ideas straight in economics." I would agree with lil_cain -- Krugman's econ work was brilliant -- while point out that Cochrane's critique was largely that Krugman is no longer practicing economics.