It’s become a cliché that this generation of macroeconomists have withdrawn from the actual world and embedded themselves in a cocoon. You can get a Nobel Prize in Economics for dreaming up an equation that doesn’t have to be tested against real events in actual economies. (How the physicists, who must wait patiently for confirmation from reality, must envy them.) Too much emphasis on methodology, is the usual conclusion. But Mark Thoma, in the Fiscal Times has something to say about that:
“There has been quite a bit of criticism directed at the tools and techniques that macroeconomists use, e.g. criticism of dynamic stochastic general equilibrium (DSGE) models, but that criticism is misplaced. The tools and techniques that macroeconomists use are developed to answer specific questions. If we ask the right questions, then we will find the tools and techniques needed to answer them. The problem with macroeconomics is not that it has become overly mathematical – it is not the tools and techniques we use to answer questions. The problem is the sociology within the economics profession that prevents some questions from being asked. Why, for example, were the very questions we needed to ask prior to the Great Recession ridiculed by important voices within the profession? The key to a better economics is to ask better questions, and that will require a much more open mind – particularly from those in charge of what gets published in economic journals – about the kinds of questions economists are allowed to ask.”
This is an interpretation that would be understood by someone in the natural sciences (e.g. geophysics, or epidemiology, or climatology.) Asking the right questions is the key. Thoma asks why these questions were actively discouraged. He knows the answer, but leaves us to connect the dots. It was the result of a profession being hijacked by an aggressive ideology bent on suppressing real inquiry, and substituting a kind of Lysenkoist agenda. It was made possible by a revamped system in which the principles of academic autonomy and objective inquiry have become mere ectoplasmic traces. Macroeconomists who did ask the right questions didn’t seem to get far in academic careers, or end up in the cushy circumstances that more “co-operative” ones did. Or rather, that’s the case in the core, but not necessarily in the periphery. The serious questioning tends to take place in second-tier universities, where the moose or the wallabies nibble the shrubbery around the quadrangle. All the more power to ’em, I say. Lysenko’s ghost can’t patrol them all.
There has been quite a bit of criticism directed at the tools and techniques that macroeconomists use, e.g. criticism of dynamic stochastic general equilibrium (DSGE) models, but that criticism is misplaced. The tools and techniques that macroeconomists use are developed to answer specific questions. If we ask the right questions, then we will find the tools and techniques needed to answer them.
The problem with macroeconomics is not that it has become overly mathematical – it is not the tools and techniques we use to answer questions. The problem is the sociology within the economics profession that prevents some questions from being asked. Why, for example, were the very questions we needed to ask prior to the Great Recession ridiculed by important voices within the profession?
The key to a better economics is to ask better questions, and that will require a much more open mind – particularly from those in charge of what gets published in economic journals – about the kinds of questions economists are allowed to ask.
- See more at: http://www.thefiscaltimes.com/Columns/2014/09/16/Can-New-Economic-Thinking-Solve-Next-Crisis#sthash.LiClsQFW.dpuf
There has been quite a bit of criticism directed at the tools and techniques that macroeconomists use, e.g. criticism of dynamic stochastic general equilibrium (DSGE) models, but that criticism is misplaced. The tools and techniques that macroeconomists use are developed to answer specific questions. If we ask the right questions, then we will find the tools and techniques needed to answer them.
The problem with macroeconomics is not that it has become overly mathematical – it is not the tools and techniques we use to answer questions. The problem is the sociology within the economics profession that prevents some questions from being asked. Why, for example, were the very questions we needed to ask prior to the Great Recession ridiculed by important voices within the profession?
The key to a better economics is to ask better questions, and that will require a much more open mind – particularly from those in charge of what gets published in economic journals – about the kinds of questions economists are allowed to ask.
- See more at: http://www.thefiscaltimes.com/Columns/2014/09/16/Can-New-Economic-Thinking-Solve-Next-Crisis#sthash.LiClsQFW.dpuf
