Matt asks me to elaborate on an email exchange we had about the incentives that face economists. In particular, how could we explain smart macroeconomists parroting the value-laden, overtly political rhetoric of Krugman or Mankiw during the current crisis. Sure, Mankiw and Krugman have a stellar publication record and can afford to rest on their laurels, but that’s not the case for most. So why don’t they take this opportunity to show their chops and give us some macro insight into what’s going on?
Robin Hanson loves to discuss status seeking and social incentives. He provides us with two possible explanations:
- Ignorance: Macroeconomists got where they are by working hard at exams and telling people what they wanted to hear. That doesn’t make them experts on the financial crisis, but it does make them people who will be turned to for an opinion. If they don’t have an opinion of their own and aren’t familiar with the theory they’ll turn to what more senior members of their profession have said. Cue saying what they’ve read on Krugman/Mankiw’s blog. I like this one because a lot of economists are so specialised, or so cloistered in academia, that they’re not really all that knowledgeable about what’s going on in the economy or theoretical developments since their grad school days.
- Status seeking: They have an opinion but they know laypeople won’t understand the brilliance of it so it’s not worth telling the press about. Instead they associate themselves with the opinion of a brilliant member of their profession by repeating it. By publicly affiliating themselves with the opinions of highly regarded economists they gain status in the eyes of others. Of course, the affiliation isn’t a very close one unless the brilliant one acknowledges you, so this explanation isn’t especially strong.
So what other potential explanations are there for the cacophony of similar value judgements we’ve heard from economists?