Wednesday, January 2, 2013

Events and theories

Did we miss a chance to get it right?  Is modern macro an intellectual vacuum?  Based on micro-foundations?  Ultimately political? 

And you thought economics was dull.....  (see link here)

The freshwater economists are now faced with incontrovertible proof that they were wrong and the saltwater school was right. Their reactions, it seems to me, are no different than what anyone wedded to an inflated idea of their self-worth. Not only were they wrong, they have lost the argument to people they feel are their intellectual inferiors and to women. They are angry and denying, denying, denying.

The saltwater school, on the other hand, is having to reevaluate a great many of their ideas, not the least about collegiality and scientific epistemology. The recognition of the contempt in which their colleagues held them has to be a shock to many; I think I detect traces of it in Delong's writing, and in Prof. Krugman's. Likewise, the recognition that many freshwater economists were not thinking scientifically at all, but rather bound by prejudice and intellectual rigidity seems to have come as a shock.


Is there incontrovertible proof?  If so, what is it?  That's what we will talk about in this class. 

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