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What Is Wrong With Economists?

 January 10, 2012 12:59 PM


Hoisted from Comments: Bob Athey:

Brad DeLong: Hoisted from the Archives: Yet More Corruption at the University of Chicago...: One thing that continually puzzles me about this New Classical Vs (New?) Keynesian / "Freshwater" Vs "Saltwater" or whatever you call it conflict is that I thought economics was supposed to be a social science with substantial analytic content. I mean, over the course of my career in military operations research & systems analysis I crossed paths with more than one economist (my father included) who didn't have nearly as strong a background math & science as I do, but they invariably were quite capable of handling the tough problems. They understood the science of using simplistic mathematical models to reason about complex systems as well as I did, sometimes better. So why do these so-called "conservative" economists have so much trouble understanding that there can be conditions under which the models that interest them most break down?

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I remember Olivier Blanchard saying, after he read the introduction to Lucas and Sargent's Rational Expectations and Econometric Practice, that it seemed clear to him that they had little experience in trying to estimate coefficients at all--and, indeed, when they did acquire some experience, they then dropped estimation for calibration because, qs Sargent reports Lucas saying, estimation was rejecting too many good models.

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I think it is the triumph of ideological blinders. If you don't take the world seriously when it speaks to you, you wind up in some very odd places indeed...

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