Sunday, September 9, 2012

A few links

1. Mark Thoma on misrepresentations of Keynesianism by Jeff Sachs. He comes out treating Sachs much how I've been treating Sumner these past few months: pointing out that the guy is advocating much the same stuff for much the same reasons, so why in the world is he being so divisive and insistent on convincing everyone that there's a big group of people that disagree with him? I don't understand that mindset and apparently Mark Thoma doesn't either.

2. My crush and fellow W&M econ alum, Christina Romer, has a good column on why the Democrats need to present a deficit reduction plan rather than just criticizing the Republican plan. She emphasizes the same point she's been making for a while: smart deficit reduction is a combination of short term accomodation and medium to long-term cuts. The primary driver of the deficit right now is the recession. Deficit reduction that makes the recession work isn't just bad macroeconomics - it's a bad way of reducing the deficit.

3. Bryan Caplan has his response to Steve Horwitz on Austrian empiricism. I haven't gotten to read it in full yet, but Cato gives a good summary and Bryan leads with a summary, so I have a good sense of several of his points and I agree with a lot of them. One of them is that Steve understates methodological pluralism in the mainstream. This is a good point, certainly in the fields that I'm involved with (labor, welfare policy, job training). There are lots of case studies, site visits, etc. going on that economists are actively involved in. I think there are a couple reasons why people miss this. First, sometimes these economists are working in public policy departments or they're partnetering with the non-economic sector, so they're missed by other economists. The product is often a big report for a government agency or a book, rather than a journal article. And if a journal article is published in a major journal usually it only deals with the quantitative data in the project, and not the qualitative. Anyway, I've gone from a qualitative data skeptic to an enthusiastic participant in that kind of research, so I think it's good to highlight.

Bryan also points out that a lot of the "Austrian empirical work" that Steve points out isn't really distinctively "Austrian", it's just normal empirical work done by people that like Austrian economics. You wouldn't know the authors were Austrian by reading it, in other words. It's mainstream economics. While I'm not intimately familiar with everything Steve listed, this is my impression too. It's an important observation for those of us (myself included) who would like the good elements of the Austrian school to be incorporated into mainstream economics. It shouldn't be a criticism of those studies.

1 comment:

  1. Agreed regarding Jeff Sachs. I don't see why he's said that Keynesianism has experienced it's last hurrah, when he himself is a Keynesian. Perhaps his time advocating policy has jaded him to the likelihood of Keynesianism being implemented correctly, but it doesn't mean the theory behind it is wrong.

    Regarding the deficit...shouldn't private debt forgiveness be on the table? After all, debt deflation seems to have had an effect.

    As for empirical research...this is probably off-topic Daniel, but is experimental economics one of your research interests, or no?


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