Monday, October 10, 2011

Assault of Thoughts - 10/10/2011

"Words ought to be a little wild, for they are the assault of thoughts on the unthinking" - JMK

- Ryan Murphy on a few of the many reasons why microeconomics is really goofy.

- Apparently the Fed is breaking the law: it is illegally being too contractionary (was this one featured in Paul's "End the Fed"? Somehow I doubt it).

- I've seen a lot of people make claims that this is some kind of anti-Keynesian Nobel prize. That's really not the case. Sargent and Sims are famous for refuting a naive way of doing empirical macroeconomics that was fairly understandable given the immaturity of the field of econometrics. It was a rebuke that would have been leveled against anyone who was using econometrics for macro work at the time - it just so happened that Keynesianism was ascendant. But there was nothing especially "Keynesian" about the econometrics, and todays Keynesians are some of the foremost practitioners of the empirical innovations of Sargent and Sims! So don't take a poorly-informed newspaper explanation of the prize at face value. Good praise for the winners from Keynesians are here and here. As much as people want to make this science into a factitious shouting match, it's really not. The shouting is a fun sideshow in the blogosphere, but the issues that animate the blogosphere don't really animate most of economics. The shouting is also a part of the political process, but that does not mean that that goes on in the science. I certainly think the prize is richly deserved, and anyone (from either side) who wants to second guess Sargent because of the rational expectations stuff needs to read that interview I linked to in my earlier post first.


  1. Daniel,

    Just to follow up on your claim over at Cafe Hayek that my statements are overly sweeping I'd be curious to see what you think of this summary from Ravi Batra on the causalities leading to our current economic problems.

    Yeah, it's sweeping but any summary trying to explain what has happened necessarily must be. The question is which summary best fits history and the facts.
    I respect you and your tempered posts but I feel a bit as if you have to "out me" just to keep your own credibility with the Cafe Hayek crowd.

  2. Blatant self-promotion...

    I recently wrote a little something on Dryden:

  3. Why should the law state that the authorities must necessarily choose one kind of policy and not choose any kind other kind of policy?

    The Federal Reserve must have a particular kind of interest rates by law and not raise it beyond that? Why? Because only one way to do things is right in all seasons?

    Anyway, the Federal Reserve has not been contractionary, although you may more appropriately argue it has not been expansionary enough. Big difference.

  4. Which short-term interest rate? What's LIBOR at?

  5. The Government Arrange must have a particular type of prices by law and not increase it beyond that? Why? Because only one way to do items is right in all seasons? 英文seo


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