Monday, December 17, 2012

Saltwater, Freshwater, and OMG! Paul Krugman linked me

A brand new post for new discussion of "Saltwater, Freshwater, and Economic Policy: a reaction to a Brad Delong interview." No moderation delay here.

And thank you to Paul Krugman for the link!


Nan Shednu said...

"It is hard for me not to see this as fitting into a pattern of threatened male privilege...."

Generally I agree with the overarching points of your post but I have to disagree here. I think you are right in that this has all the same trappings and patterns as defending male privilege but yell I would argue has nothing to do with it. I mean are you implying that all the dissenting female freshwater economists are actually just men in disguise?

Where I think you are right is that this does definitely appear to be defense of privilege, but all defense of privilege has the same patterns and trappings. Thus defense of economic-academic and political policy privilege will superficially look just like defense of male privilege even though they have nothing to do with one another – they are both fueled by the same underlying human behavior that is neither unique to men nor to sexist thought and action.

Sexism still sadly exists and has a large negative impact on the world but it is not responsible for every single bit of ill and evil in the world. The same unfortunate human behavior that leads to sexism leads to other bad behavior totally independent of sexist thought and action.

Jay Ackroyd (@jayackroyd) said...

Thank YOU Raven for posting this, way back when.

As for the intellectual support for the New Classicists, it's worth remembering that Sargent and Sims shared the 2011 Nobel Memorial Prize.

Part of the problem is economists' math fetish. So many of them were kids who couldn't cut it in math and physics--and the "sophisticated" (state space, dynamic optimization) freshwater models look kinda like math and physics.

But, IME at Minnesota in Sargent's course, this doesn't work out well. Half the students learned, essentially by rote, how to solve dynamic optimization problems that take a particular form. The other half actually understood the math, but didn't have much economics intuition--and the trouble is that these models really don't work. (Neither do the traditional, multi equation macro models that Lucas originally criticized--but the people running those models always fixed the results ("add factors") before publication.)

These modeling methods don't lend themselves to the kind of analysis Krugman does, which relies heavily on gross simplification and trained intuition. IOW, they can't tell when they're wrong. But they know they're smarter than you because they know more math....

The Raven said...

Nan Shendu, Women can and do participate in anti-women sexism. Women can also be persuaded by the arguments of sexists without themselves.

I don't think sexism is the whole story here, but sexism is part of the story because it is part of privilege in our society.

Here we have Prof. Robert Lucas insulting Prof. Christine Romer: here we have Robert Lucas saying, "The Moody's model that Christina Romer -- here's what I think happened. It's her first day on the job and somebody says, you've got to come up with a solution to this -- in defense of this fiscal stimulus, which no one told her what it was going to be, and have it by Monday morning."

This drips with contempt. And it is so exactly like the sexist things often said about women academics--"she was told to do it," "she wasn't really competent," she faked it"--that I think it is sexism. It walks like a duck and quacks like a duck. I can't quite say that it is a duck without closer examination, but still.

Jay, you're very welcome.

In your remarks, I think this is the first time I've heard anyone with an economics education say that we have people who understand math but not the data and people who have data but not the math. It's something I constantly run into in my own work: people like Krugman who understand both are the real experts.

It is also (I have written before) symptomatic of a basic collapse of scientific ethics in the field: the failure to honestly test theories against experimental evidence. I had put it down to malice, and that certainly is present, but I think you are correct that it is also both a failure of education and a failure of competence.

Melanie Friedrichs said...

Yes, interesting, very honest post..
I'd agree with Nan that the saltwater/freshwater split doesn't lend itself easily to commentary on sexism.. the sad truth is that there are hardly any women on either side (my first look at the rankings of top cited economists as a young undergraduate was an discouraging and depressing experience).

I would agree that the more freshwater contempt is largely reactionary and defensive-- they're defending principles they can't quite mesh with the data but that they wholeheartadly believe to be true, quite like the reactionary patriarchy of traditional societies against modernization and equality of the sexes ( . However, where reactionary patriarchy is unjustified, I think the freshwater economists may have a point.. a true resolution to the saltwater/freshwater debate will have to square with those principles.

Krugman's casting himself and Delong as Hamlet and the freshwater as King Claudius, but of course the rottenness stems from both sides, driving everyone a little bit mad...

The Raven said...
This comment has been removed by the author.
The Raven said...

Melanie, More Hari Seldon than Hamlet, I think. But they are both tragic figures, though redeemed by history.

What do you see as salvageable from the macro-economic theories of the freshwater school? When the school's leaders are engaged in a huge effort to deny plain data, is there anything left?

Jay Ackroyd (@jayackroyd) said...


These comments are actually inspired by a blog post I read a couple of years ago that I can't possibly find. (Stuart might be able to.)

In it, the policy economist expressed surprise and dismay that a mathematically oriented new classical guy actually took the results of his calculations literally, instead of subjecting them to an Econ 101 evaluation and rejecting them as, well, naive and stupid.

This was telling, doubly, because first, the policy guy was criticizing the competence of the math guy but, second, because he was admitting that these models really don't work.

For a long time, I've been quoting Robert Solow's Growth Theory, where he describes "stylized facts." I don't think macro can go beyond that--that there are some general principles you can apply, but you can't push them too far. Rigor really isn't possible. (There are good, rigorous reasons in the literature to support this, by the way. The New Classical critique makes some of these arguments. Others are old, like the "adding up" problem. There's no way to add up the preference orderings of a collection of consumers in an economy to arrive at an aggregate demand number. This is at the heart of the NC "where are the people in this model?" critique of Keynsians.)

The Raven said...

Jay, continued on next rock: