Political affiliations of modern macroeconomists

Will Wilkinson has words for macro economists. He got me thinking about the political affiliations of macroeconomists. Here’s what I’ve found:

Macroeconomist’s name IDEAS rank Political affiliation Views on fiscal stimulus
Robert J. Barro 3 Republican?, no political appointments Tax-cuts not spending
Robert E. Lucas 5 ? Con, but concerned about sudden drop in consumption
Edward C. Prescott 7 He signed a statment opposing Obama’s tax/trade policy ?
Martin S. Feldstein ((Feldstein has a short NBER paper on fiscal policy (with no model) and he’s also written against Ricardian equivalence but he doesn’t usually write on macro stuff.)) 8 “conservative” Pro, likes military spending
Daron Acemoglu ((Technically Acemoglu is a growth economist, but he writes about everything. EVERYTHING.)) 10 ? Con, worries about long term consequences
Olivier Blanchard 13 ? Pro
Mark L. Gertler 14 ? ?, but he says monetary policy can still be effective
Thomas J. Sargent 17 ? Con
Lars E. O. Svensson 21 ? ?, but has written on the effectiveness of monetary policy when interest rates are zero
N. Gregory Mankiw 22 Republican Con
Jordi Galí 25 ? ?, his research is the only legitimately modern macro that shows fiscal stimuls can work
Ben S. Bernanke 33 Republican appointee His public statements are Pro, but I’m not sure what his private opinions are. His research is all money all the time.
Michael Woodford 34 ? ?, but in a survey has said the consensus is “fiscal measures are not suitable for accurate ‘fine-tuning’, even if it is not agreed that they have little effect.”
John B. Taylor 49 Republican appointee Pro, but has shown the recent tax rebate was ineffective at stimulus

It seems most macro folks are conservative or Republican. The Gali paper on effective fiscal policy seems like it might be worth taking a look at.

You’ll notice Delong and Krugman (and Alesina, Becker, Cochrane, Fama, Murphy, and Zingales) are missing from this list of MACROeconomists. This is because they are not macroeconomists.

It seems to me the historians were calling the finance people boneheads for their ideas on macroeconomics. I wonder what the planetary scientists think about the exobiologist’s views on theoretical cosmology.

11 thoughts on “Political affiliations of modern macroeconomists”

  1. Oh please, this is a pure argument from authority. Today’s modern macroeconomists are experts in representative-agent equilibrium models, which is fine as long as the world behaves according to one. But the roots of this crisis lie began with things like asset bubbles and credit markets – which do not exist in these models. Did Lucas, or Sargent, or any other big-name modern macro guy note the housing bubble or the overleverage of the banking system? Can they capture these things with the models that have made them famous? The historians (who have at least studied the Great Depression, another thing modern macro cannot explain) and the finance guys have just as much claim to expertise as anyone else.

    Not that I endorse Keynesian stimulus – every argument that I’ve seen so far is based on the handful of past recessions and arm-waving. But if there’s one thing this crisis is shown, it’s that macro has barely begun to explain the world.

  2. A list of links to arguments by a group of experts is argument from authority? You have a strange sense of that phrase.

    Regarding “representative agent equilibrium” models: they’re models. If you don’t like them, then produce your own models that explain aggregate statistics. Besides, don’t you think experts on these models would be best at figuring out what’s wrong with them?

    Also, I’m not suggesting what planetary scientists think about exobiologist’s views on theoretical cosmology isn’t interesting information about the state of knowledge regarding that subject… I’m just suggesting getting theoretical cosmologist views on their subject may be more enlightening. BTW, theoretical cosmologists’ models are proved wrong all the time and no one suggests handing the study of their subject to the exobiologists or the planetary scientists.

  3. In today’s language Macroeconomics = General Equilibrium. The names you exclude do partial equilibrium. The goals of partial equilibrium models are more modest than those of general equilibrium. It seems that one can get more robust predictions about specific markets with appropriate partial equilibrium models. General Equilibrium has been a giant failure that cannot take into account these facts: markets do not clear, the law of one price does not hold, and that radical heterogeneity exists both on the supply and demand side. Why should we care what “Macroeconomists” think?

  4. We should care about what macroeconomists think because they build models that replicate the features of the macroeconomic time-series data. This means they know a lot about those time-series and they have a good sense for the underlying processes that are producing them. If you care about “unemployment” or “gdp” or “consumption” then you should look to models that predict movements in those variables. Macroeconomists have those sorts of models.

    You complain about some of the simplifying assumptions sometimes made by macroeconomists in their models. Depending on what behavior you’re trying to understand some of these assumptions are more or less crucial. However, if an assumption, however unrealistic, helps produce a model that does a good job predicting behavior, then I don’t see what harm there is in using it.

    To use an example from outside economics: chemist often assume the atomic theory of matter is literally true, i.e. there’s these little balls of mass that have different flavors of behavior. This makes their analysis much more simple because they don’t have to worry about all the sub-atomic stuff going on… Chemistry has done a pretty good job understanding, well, chemistry. You wouldn’t suggest they drop the atomic theory because its unrealistic, would you?

  5. Maybe the assumptions used in macro weren’t obviously an issue before, but not this time. For example: suppose we are solving for equilibrium in a representative agent monetary model with bonds and some sort of income process. What do we do? Well, in equilibrium, we note that the net trade of bonds must be zero, and since there’s only one agent, the quantity of bonds bought by the agent is always zero. So we have a nice equation where consumption=income, which gives us prices, etc. However, we’ve just proved that the agent never takes on debt. Was debt a factor in this recession (and the boom that preceded it)? My eyes tell me yes – that securitization enabled subprime loans, overbuilding of houses, leveraged spending and investment, etc. Here’s an aggregate statistic that’s been going around – the ratio of total debt to GDP over time:


    But this cannot fit into a representative-agent model. Or take another example: an asset bubble. My eyes tell me that there has been a bubble not just in housing, but in nearly everything that could be financed with cheap credit – shopping malls, private equity buyouts, etc. And now that the bubble has popped, the negative wealth effect drives down consumption in aggregate. Yet in nearly all macro models, bubbles cannot exist – certainly not with a representative agent and rational expectations. Now today’s modern macroeconomists have spent their careers studying such models – but why should I expect them to be experts on credit and bubbles, when their models never called for such things? I think that they have no claim to greater expertise than historians or finance or trade specialists – or even non-economists like hedge fund operators or bankers.

  6. I agree that the new data provided by our recent macroeconomic experience will provide fodder to many different kinds of students of economics. I certainly never claimed that macro people should have exclusive hearing of their opinions.

    That said, there are macro models where entrepreneurs borrow based on the value of their portfolio. In a sense, bubbles are created or popped when asset prices go up or down as entrepreneurs where more or less able to loan money for investment projects. Ben Bernake, one of the authors of these models, called these effects the “financial accelerator”.

    The point being, macro folks have studied the importance of the financial sector for macro outcomes. I suspect this topic will become even more important in macro given our recent experience.

  7. How is Acemoglu a “con”? The last paragraph of the linked article seems pretty pro to me…

    “A comprehensive stimulus plan, even with all of its imperfections, is probably the best way of fighting these dangers. Nevertheless, the details of the stimulus plan should be designed so as to cause minimal disruption to the process of reallocation and innovation. Sacrificing growth out of our fear of the present would be as severe a mistake as inaction. The risk that the belief in the capitalist system may collapse should not be dismissed.”

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