Tuesday, January 29, 2013

Two gender econ things

First - you all might have missed it but Krugman recently favorably cited research by freshwater economists. And not just any freshwater economists, but real business cycle theorists! This was in his post about the decline in non-work hours over the last several decades.

Real business cycle theorists have been doing a lot of fantastic work incorporating gender and household production into macroeconomics, because time spent in (unpaid) household production turns out to be quite important in considerations of labor supply levels. Unfortunately, they don't get a lot of credit for this either from macroeconomists (who are not primarily concerned with these issues) or from economists interested in gender (I think probably because they're just not reading the real business cycle literature as much, because they don't figure it will be relevant).

But don't ever say Krugman doesn't have a kind word to say about RBC!


In the gender macro class, we have to do weekly reaction essays to readings as well as participate in an online discussion board for the class. Lately we've been working with models by development economists as well as some post-Keynesian models that look at the role of gender wage disparities and the feminization of the labor force for how economies react to price shocks (generally export prices). One of the points I raised on the discussion board recently concerns the mainstream vs. heterodox issues that come up on the blog occasionally, so I thought I'd share it:

"I don't necessarily agree that heterodox models are either "more realistic" or better equipped to incorporate gender than mainstream models. I think the case for heterodox models along these lines is overwrought. The advantage of heterodox models (post-Keynesian, Kaleckian, Kaldorian) is that since the eclipse of the use of the Keynesian cross in formal macro work, they are some of the only models that give prominence to issues of effective demand, paradoxes of thrift, the futility of wage cuts, and those sorts of things. That's a major advantage, and one of the reasons why I like these models - but I don't think it makes them more realistic than mainstream models. Mainstream models generally do a better job of incorporating expectations, price setting behavior, intertemporal choice, and microfoundations. These are all areas the mainstream has pushed forward while heterodox economists have been working on other problems. You really need a rich set of perspectives to draw on, I think.

This is a little tangential to the point about gender, though. The special advantage that heterodox models have for gender is their tendency to divide economic actors into classes (sort of a classical/Marxian carry-over), which lends itself naturally to gendered classes like "men" and "women". If we think the response of investment and savings are sensitive to the relative participation of men and women in the labor force (as Erturk and Cagatay (1995) propose), a heterodox approach is a natural one.

Mainstream models have advantages in working with gender too, though. Bargaining models are mainstream, and one of the big reasons why we think gender disparities exist is because of power relations between men and women that can be easily modeled by assigning men higher bargaining power in a model. Standard labor supply models have done a fine job incorporating unpaid work - I don't know of an equivalent heterodox approach to labor supply (which is not to say there isn't one).

The more tools you've got in your toolbox the more likely you are to be able to answer a question that pops up."


  1. So, explain the difference (as you see it) between fresh and saltwater economists.

    1. If you're just asking about why he classified the paper as "Freshwater", it's by very "Freshwater" economists (especially Ellen), from a very "Freshwater" research department at the Bank of Minneapolis (where even Prescott did a lot of work).

      If you just mean the general discussion of the differences, well, that's too much for a reply.


  2. "But don't ever say Krugman doesn't have a kind word to say about RBC!"

    I guess. They just have to agree with his ideology for him to say kind words. If you showed him this:


    He'd probably agree. Don't go saying he's a part of the Chicago school, though.

    With the rest I'd agree, especially with your discussion board post.

  3. Good point about how heterodox stuff suits gender studies because of its classical roots. The mainstream approach would model even a slave economy as consisting of a single representative agent with perfect foresight and eternal life, destined to be slave and master alike for all time. In the actual slave economy, the interests and behaviors of masters, slaves, and private actors not engaged in slavery were substantial and important. So the mainstream approach might have its uses, but it wouldn't quite tell the whole story.

  4. "Real business cycle theorists have been doing a lot of fantastic work" <-- no

    1. They're some of the only macroeconomists that are bringing gender and unpaid work/household production issues into macro.


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