Matt Nolan

Why more criticism of macro?

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Tim Harford – someone I personally believe is one of the best economists of our time – has come out stating that modern macroeconomics is a failure. (ht Economist’s View – note that commentary in this post is very good, I agree with much of what Mark Thoma is saying except for the belief that the economic model is different between now and “normal” times.  His point on the lack of data to calibrate is very very true).

Now, Tim Harford is one in a list of very smart, non-macro economists who are attacking macroeconomics.  I don’t agree – as I’ve discussed here.

My main concern now is not so much that these incredibly smart people are attacking the discipline – a discipline does its best work when it is being critiqued.  My main concern is the lack of counter-arguments I am seeing from real macroeconomists.  Where are they?  Where is their defence?  I have stated why I think contemporary macro is defendable – but I’m no macroeconomics professor from Harvard.

Until macroeconomists can define the role and scope of their research, and justify their methodology in a way that other disciplines can relate to we are just going to be stuck with arbitrary criticism.  As a result, I think the lack of explicit discussion surrounding methodology is the real issue in macroeconomics …

Matt Nolan

Economics Carnival

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Curious Cat has an economics carnival on at the moment.  It is a good idea – it is interesting that economics doesn’t seem to have as many carnivals while other disciplines do.

Go check out the posts from all around the economics blogsphere.

jamesz

Americans growing more tolerant of gay marriage

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After the sadness of California passing Proposition 8 banning gay marriage last year, there have been a couple of recent victories for civil rights campaigners in Vermont and Iowa. That motivated Nate Silver to work the numbers and ask when we might expect the rest of the US to reject a ban on gay marriage. The outcome is shown in the following diagram from The Map Scroll:

Rejection of ban on gay marriage

Rejection of ban on gay marriage

Read more

jamesz

Economists: more human than you think!

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I like the preface to Bryan Caplan’s new book, Selfish Reasons to Have More Kids. He says:

I doubt that “They’ll help me out when I’m old,” has ever been a good reason to have kids. Love tends to run downhill; as an old saying ruefully observes, “One parent can care for five children, but five children cannot care for one parent.”
…
The only promising way to meet the “What’s in it for me?,” challenge is to appeal to the intrinsic or “consumption” benefits of children. … if someone asks “What’s in parenthood for me?,” you’ve got to highlight kids’ cool features: They’re ridiculously cute; they’re playful; they’ll look like you; they’ll share half your genes; it’s all part of the circle of life.

It’s an obvious point, but one often missed by budding economists (at least the undergrad econ students I see), that economics deals with ALL benefits. Read more

jamesz

Quote 21: Winston Churchill on the equity-efficiency tradeoff

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The inherent vice of capitalism is the unequal sharing of the blessings. The inherent blessing of socialism is the equal sharing of misery.

— Winston Churchill.

So, really, it’s all about value judgments.

jamesz

Stats to ponder

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I’m lucky enough to be flicking through the latest Review of Economics and Statistics so I thought I might sum up a couple of interesting tidbits while I’m reading: Read more