Arnold Kling  

Some Pushback to Krugman

Moral Hazard and Capital Struc... What if Lehman had been Bailed...

From John Cochrane and from Daniel Klein.
Cochrane writes,

Most of the article is just a calumnious personal attack on an ever-growing enemies list, which now includes "new Keyenesians" such as Olivier Blanchard and Greg Mankiw. Rather than source professional writing, he plays gotcha with out-of-context second-hand quotes from media interviews. He makes stuff up, boldly putting words in people's mouths that run contrary to their written opinions. Even this isn't enough: he adds cartoons to try to make his "enemies" look silly, and puts them in false and embarrassing situations. He accuses us of adopting ideas for pay, selling out for "sabbaticals at the Hoover institution" and fat "Wall street paychecks." It sounds a bit paranoid.

Klein offers survey data to refute Krugman's claim that Keynesians were "marginalized."

I remain sympathetic to Krugman's complaint about the sterility of macroeconomics over the past 30 years. However, I do think that by using the New York Times as his outlet, he mounted an academic assault from a fortress where his opponents have no chance of firing back at him. If instead he had made his point in an academic journal, then (a) he would have been forced by an editor to adjust the ratio of his rhetoric to his evidence base and (b) had to content with equal-time responses from those he attacked.

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CATEGORIES: Economic Methods

COMMENTS (7 to date)
Troy Camplin writes:

Of course, in Krugman's article on the sorry state of macro, as is typically the case with Krugman, when he's right, he wrong. Keynesians marginalized? Are you kidding me? Too many are in positions of power. Take anything Keynes said, assume the opposite, and you are much more likely to have a real understanding of how the economy works. Macro is in a sorry state because the Keynesians have been the ones to write the macro textbook. They ARE the problem with macro.

david writes:

In today's episode, we find out that Troy Camplin spent the entire monetarist era in suspended animation. Welcome to 2009, Camplin!


Kevin Donoghue writes:

Ye gods, does Cochrane think Krugman commissioned the cartoons? "It sounds a bit paranoid" is a nice example of projection.

"Klein offers survey data...." with a response rate of 26.6%.

And where does the idea that "his opponents have no chance of firing back at him" in the NYT come from? Other economists have been known to publish there.

paul writes:

the Cochrane Krugman fight reminds me of two queens in a bar fighting over fashion sense.

"Academics heal thyself"

Sam Wilson writes:

The piece reminded of nothing so much as a Jack Chick tract. All it needed was a Sandwich Chef and it would have been perfect.

"This is a macroeconomist sandwich. It is made of math and poo"

Drewfus writes:

Consider a scale with a range of 0-10 that depicts the multitude of common problems faced by the human race. Zero is the easy end, ten the hard end.

Something like the invention of money might be considered a one-out-of-ten problem, whereas explaining the existence of the universe or a complete understanding of conciousness might be regarded a 10 (the hardest problem imaginable).

Now give an estimate of the hardest problem that the human mind might be able to solve - ever. Say general AI or the unification of quantum mechanics and relativity theory. Eight out of ten?

So what about understanding the macro-economy in a detailed sense, and being able to make reasonably accurate forecasts for a year or two into the future. What would you grade this on the 0-10 scale?

Troy Camplin writes:

Monetarism was an embarrassing episode of what were otherwise sensible free market economists taking Keynes seriously on this one thing. Monetarism is less stupid than outright Keyesianism -- it gave us the 1980s rather than the Keynesian 1970s -- but its foundations in Keynesianism were bound to catch up with it.

Here's an idea: abandon all government-controlled money theories entirely, as they have been shown to have precisely this outcome, and instead have a monetary spontaneous order. Would we be surprised if we found that such a system coordinated much better with the economic spontaneous order?

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