Noah Smith — Scientific failures: particle physics vs. macroeconomics

Noah Smith is a physicist turned economist and he frequently has interesting things to say from this vantage. This is one of them, for anyone interested in this sort of thing.

Read it at Noahpinion
Scientific failures: particle physics vs. macroeconomics
by Noah Smith

His conclusion is, shall we say "controversial," in light of MMT and allies like Wynne Godley that predicted the global financial crisis and explain what to do to correct in terms of a well-developed heterodox theory.

This cycle of theoretical stagnation --> comfortable professional consensus --> internal revolt --> outside pressure seems to be common to a lot of scientific disciplines. However, there are a few big differences between the two insurgencies I've described, all of which suggest that Lucasian macro will be around long, long after string theory has disappeared behind the event horizon of history.

For one thing, physics is suffering from being too good. Our existing theories may be ugly, but they work devilishly well. This means that if physicists decide to abandon string theory, they will just dream up something else, possibly using many of the very mathematical insights that they gained from working on string theory! In macro, on the other hand, we basically have no theories that work well (or if we do, we don't know which ones they are!), so if we give up on DSGE, we're stumped...and people don't like to be stumped. Second, while demand for high energy particle theorists appears to have collapsed, demand for macroeconomists continues to be incredibly strong. Finally, economics as a profession does not have the experimental tradition that physics has, which means that not making predictions is a much less severe public relations blow to a physics theory than to an econ one.

Someone tell him about MMT and Wynne Godley.