Saturday, January 24, 2009

Are Economists Completely Clueless?

. Saturday, January 24, 2009

Will Wilkinson asks the question, in a series of posts. A highlight:

When I see Delong more or less indiscriminately trashing everyone at Chicago, or Krugman trashing Barro, etc., what doesn’t arise in my mind is a sense that some of these guys really know what they’re talking about while some of them are idiots. What arises in my mind is the strong suspicion that economic theory, as it is practiced and taught at the world’s leading institutions, is so far from consensus on certain fundamental questions that it is basically useless for adjudicating many profoundly important debates about economic policy. One implication of this is that it is wrong to extend to economists who advise policymakers, or become policymakes themselves, the respect we rightly extend to the practicioners of mature sciences. There is a reason extremely smart economists are out there playing reputation games instead of trying to settle the matter by doing better science. The reason is that, on the questions that are provoking intramural trashtalk, there is no science.

Sadly, there is no one better to listen to.

In a follow-up, he says that it is macro that is embarrassing and unscientific, while micro (esp. applied, experimental micro) is just fine. He'd probably hate IPE scholars the most, if he knew of any besides Drezner. In any case, Wilkinson is basically repeating the old criticism of economists: if you ask one a question, she will always answer "It depends". But the thing is, it really does depend. The Krugman/Barro, DeLong/Chicago bouts are about which historical economic episodes are most analogous to this one, or which assumptions of which models are appropriate for analyzing our current situation, and which are inappropriate. Those questions are the right ones to ask, despite the fact that the answers aren't always clear. There is some room for legitimate disagreement so the lack of consensus is nothing to get worked up about. And anyway, would Wilkinson trusts economists more if there was consensus, but no debate?

As for the "is it science or is it not" canard: I, for one, really don't care. But while we're at it, I'd ask Wilkinson this question: Is physics cleaner at the micro or macro level? How about evolutionary biology? Psychology? Of course there's more complexity -- and thus more room for doubt -- at the macro level. The difference is definitional, so Wilkinson's argument is close to tautological.

In any case, acknowledging complexity and a lack of consensus does not discredit macro studies, just as acknowledging the debate over string theory or the big bang doesn't discredit physics or make it any less scientific.

(All that said, I do think that DeLong and Krugman are being unnecessarily cruel towards Barro and Mankiw and the Chicagoans, even though I think they are substantively more persuasive. This is completely in line with DeLong/Krugman's historical attitudes towards dissenting opinions, and some measure of it is probably for show. I don't think that Barro and Fama have done their best thinking on this particular topic. But that has nothing to do with what Wilkinson is really saying.)


Are Economists Completely Clueless?




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