Comments like this are ubiquitous with SW. The question is who is it aimed at?
"Mark Thoma reminded me about a piece by Jim Bullard, which gives a nice perspective on the role that macroeconomic research can play in policy circles. I especially liked this paragraph:
"Mark Thoma reminded me about a piece by Jim Bullard, which gives a nice perspective on the role that macroeconomic research can play in policy circles. I especially liked this paragraph:
In macroeconomics, the intellectual challenge is every bit as great as it is in other fields that have unsolved problems. The economy is a gigantic system with billions of human decisions made every day. Furthermore, people look to the future and try to predict the behavior of the system as they make their decisions today. How are all these decisions being made? How are people reacting to the market forces around them and to the changes in the environment around them? How can we effectively summarize their behavior at an aggregate level? How is policy interacting with all those decisions? These are not questions that can be addressed with a wave of the hand, a clever speech or a witty blog posting. There is just no substitute for heavy technical analysis—plenty of math and statistics combined with plenty of computing power and plenty of intellectual creativity—to get to the bottom of these issues. We might as well admit that progress in attaining satisfactory answers is going to be slow, but still this is the only reasonable course to make progress."Excellent. A policymaker who understands that there is a lot we don't know, and that it's going to be hard slogging to improve on what knowledge we already have - or think we have. But he also seems to know where to look to get answers, and has respect for the economists doing the heavy lifting. For all of the young economists at the ASSA meetings looking for work, take note. This is the type of person you want to have in charge of the place where you plan on setting up shop."
Don't get me wrong, one might read this and find it an innocent lauding of researchers-surely what they do is very important and surely there's much in economics we don't know. Still I don't find it totally innocent. Who exactly are these knuckle draggers who think the questions can be answered by a 'wave of the hand' or a 'clever blog post?'
With all this praise of those who do the heavy lifting this is can be understood as a rather elitist missive. What it seems to suggest is that if you aren't in economic research you ought to just keep your mouth shut. It's more special pleading on how only trained economists should have any say over economics.
What the econ establishment never gets is that this is a democracy. They may want to believe that the field of economics is wholly innocent of ideology and politics. However, this is just their own fantasy. Another elitist of course is Scott Sumner. He believes that there is 'no such thing as public opinion in economics.'
Maybe then we should take away the vote or direct voters to only consider noneconomic issues in choosing whom they vote for. Sumner never stops lauding China, yet as Unlearning Econ has pointed out, you don't need economists to have a good economy and China is actually exhibit one of this.
The record hardly makes the case that the economists always get it right and the people wrong. While supposedly knowledgeable economists like Sumner continue to claim that the minimum wage hurts the economy Americans voted for this in the 1930s. On this they were light years behind. Similarly we aw this on the end of segregation-you had many economists still making the case for discrimination on the basis of race. Reagan in 1980 actually argued for paying a discriminatory wage to Blacks to increase their employment-yes he wasn't an economist but there were many conservative economists at the time who were defending him on this. However, Americans without any microfounded models have long since ruled out such discrimination.
This is why Tony Yates at least has a clue as elitist a Freshwater economist as he is, he gets it that people-and their policymakers-may grow tired of funding people who have such condescension towards them.
So who was SW talking about? Obviously first and foremost: Krugman. I mean that's always his first target. However, more generally it's the idea that 'there's no intuition in economics'-those who lack the right model are not even capable of doing more than grunting on economic matters.
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