ARNOLD KLING
August 14, 2011
The Top Political Contributors
August 11, 2011
Gender and the New Commanding Heights
August 11, 2011
Jamie Galbraith Makes an Assumption
August 11, 2011
Macroeconometrics: The Science of Hubris
August 10, 2011
Real and Nominal Bond Yields
BRYAN CAPLAN
August 14, 2011
The Effect of Thumb Sucking on Income
August 12, 2011
The Voice of Cold, Hard Truth to All Would-Be Educators
August 12, 2011
Ability, Morality, and Prosperity: A Paper and a Report
August 11, 2011
The Theory of Time and Frittering
August 10, 2011
Male Variance and the Remnants of the Gender Gap
DAVID HENDERSON
August 9, 2011
Hayek in "Unbroken", Part Two
August 8, 2011
Hayek in "Unbroken"
August 5, 2011
James Bovard on the Peace Corps
August 4, 2011
Summers Way Off on FDR and 1941
August 3, 2011
The "Amazon" Tax
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Hi Arnold,
My graph measures a ratio as well (albeit shifted to zero):
1 - Jobs(2007)/Jobs(2010).
I would argue that this data bolsters the need for an alternative story, such as your PSST, ZMP, or perhaps the "hiring as an investment" theory (sorry, don't know a technical name for this one). PSST suggests the old patterns of trade involving construction are not sustainable, whereas the theories you are attempting to displace do not.
This is evidence in favor of PSST and related theories which distinguish between housing and computers, and against theories involving "GDP factories" and simple calculus.
I'm arguing that theories along the lines of what you propose are necessary, not that I know how to build them.
Chris
I did some similar work here, although I think my pictures are nicer.
I also go back to 1995, and index the level of employment by sector (which I see you don't like!) to 2007, and then to 2000. There might be some general trends in there, but it looks like a lot of shocks occurred too.
You call for economists to "stop looking at static concepts like sectors and instead look at the dynamics of what I call discovery." Why do you consider looking at sectors "static," and looking at discovery "dynamic"?
Dividing the economy into a relatively small number of sectors for purposes of analysis is intellectually manageable. Discovery, by contrast, seems different in each individual, and there are too many individuals. One might try to simplify matters by grouping individuals, and focusing on how discovery is carried out by a representative member of each group; but this looks a lot like the hated division into sectors.
"I think we will have to get a handle on adjustment costs . . . ." If you do this individual by individual, or even firm by firm, you will have an awfully unwieldy "handle." How about doing it *sector by sector*?
I don't think this is productive. The point of data should be to help us decide between stories. if PSST can't explain the data that Keynsians can explain, it's not more useful than Keynsian stories. There are clearly conflicts between the two stories and psst should show some sectorial differences here. Instead of dismissing the data as unimpressive show us that psst can explain this data. Psst is useful only if it explains more than the keynsians, not just different stuff.
I don't think this is productive. The point of data should be to help us decide between stories. if PSST can't explain the data that Keynsians can explain, it's not more useful than Keynsian stories. There are clearly conflicts between the two stories and psst should show some sectorial differences here. Instead of dismissing the data as unimpressive show us that psst can explain this data. Psst is useful only if it explains more than the keynsians, not just different stuff.
>I think if we are going to get anywhere with the new paradigm, we will have to come up with new metrics.
Go for it. Would truly love to see it.
Decided absence of graphics and numbers in posts here. Lots of theory. Show us the facts on the ground.