Comments on: Arnold Kling doesn’t know modern macro

By: pushmedia1

pushmedia1 — Thu, 29 Jan 2009 22:03:52 +0000

To be honest, yours is an interesting request. How does one show a discipline is empirically relevant?

What sort of evidence would convince you?

By: Orlando Roncesvalles

Orlando Roncesvalles — Thu, 29 Jan 2009 21:47:39 +0000

I don’t mean to be a pest, but I just read the Woodford paper. It’s a nice survey of the modern macro research program and successes, but I don’t think it will convince the skeptics that modern macro is any better at “empirical credibility” than simpler theories. Or that the empirical work you have in mind would convince me that irrationality can be ignored or made endogenous.

Unfortunately, I’m in a place with no access – hard or electronic – to the latest journals of modern macro. Perhaps you can send me another link, that I can try to digest.

Many thanks for your patience.

By: I May Have Been Wrong About Macroeconomics « The Emergent Fool

I May Have Been Wrong About Macroeconomics « The Emergent Fool — Thu, 29 Jan 2009 19:07:11 +0000

[...] probably also what was taught in my late 1980s undergraduate textbook. However, Will Ambrosini observes that Arnold’s views are outdated and this is a problem with non-macro economists in general. [...]

By: Sur l’état de la macroéconomie « Rationalité Limitée

Sur l’état de la macroéconomie « Rationalité Limitée — Thu, 29 Jan 2009 07:59:17 +0000

[...] dit, peut-être faut-il regarder au-delà de la théorie des cycles réels ? La macro moderne se développe maintenant à partir de modèles DSGE (dynamic stochastic general equilibrium) ne raisonnant pas à partir d’un état de plein [...]

By: ssendam

ssendam — Thu, 29 Jan 2009 01:46:00 +0000

Now even the labor economists are getting in on it. Are you gonna take that lying down, macroeconomists???

http://freakonomics.blogs.nytimes.com/2009/01/28/on-the-failure-of-macroeconomists/

By: swong

swong — Thu, 29 Jan 2009 01:33:59 +0000

Or better, like in this sense of the word.

By: pushmedia1

pushmedia1 — Thu, 29 Jan 2009 01:19:50 +0000

It should be clear from my use of the word “evangelism” that I’m not using its religious connotation (i.e. I mean something close to definition 6 here). I simply mean that there have been a number of insights and substantial progress in the field and those insights haven’t been shared with a broader audience.

I suspect Kling knows “his macro” better than I do. I’m suggesting he’s not up on the recent (the last few decades) trends in macro as its practiced by macroeconomists. I’m clearly making a claim that I know more about the state of modern macro than Prof. Kling. My whole post is an attempt to demonstrate so. I don’t see what’s wrong with that.

Which evidence would convince you of the reliability of my claim that modern macro is more empirically relevant than previous generations of macro? I linked to a paper that is a good example of what I’m talking about… but go to the library and pick up a random volume of a major macro journal from the last five or ten years and you’ll see more evidence of the importance of quantification (vs. just theoretical identification) of macroeconomic phenomenon in modern macro.

By: Orlando Roncesvalles

Orlando Roncesvalles — Wed, 28 Jan 2009 23:22:22 +0000

It seems you admit that the problem is lack of “evangelism.” This suggests that it is all about tribes and sects and followers.

But saying so-and-so doesn’t know his macro suggests you think you know better and much more.

If it’s not too impolite, may I ask if there is a good discussion of how reliable is the quantification you claim attaches to modern macro?

I suspect the answer is not very. And perhaps it is because modern macro assumes rationality everywhere, and the reality is that there is irrationality somewhere that by nature is unpredictable.

By: swong

swong — Wed, 28 Jan 2009 22:08:57 +0000

Honestly I’m not all that sold on macro either. Until your models can predict yesterday’s stock market, I don’t think they can really be considered trustworthy. They certainly shouldn’t be used to inform policy decisions.

/I kid, I kid. Been reading too many global warming threads, I have.

By: pushmedia1

pushmedia1 — Wed, 28 Jan 2009 19:26:45 +0000

Heh.

Its funny because I really like Kling. His intuitions on the economy are great. I’m just not sure why he feels the need to take swipes a modern macro when he clearly isn’t up to speed on its progress.

He may have confessed the reason in the post I’m criticizing. He may have felt burnt by he macro classes in the 70s and that’s left a bad taste in his mouth about macro since. I’m sympathetic to this… My macro classes were not at all what I was expecting coming from undergrad. It was shocking at first and I remember hating it.