Wednesday, March 16, 2016

Jason Smith — The ITE guide to schools of economics

First they ignore you, then they laugh at you, then they fight you, then you win. — Mahatma Gandhi
Wow. MMT mentioned in three non-MMT posts today. Maybe MMT is emerging from the stage of being ignored.

UPDATE: Mark Thoma links to the SWL post. Some tweets too.
  • Modern Monetary Theory = Standard macroeconomics + politics
  • Post-Keynesian economics = Standard macroeconomics + politics
  • New Keynesian economics = Standard macroeconomics
  • Market monetarism = Standard macroeconomics – liquidity trap
  • Real business cycle theory = Standard macroeconomics – sticky prices
Information Transfer Economics
The ITE guide to schools of economics
Jason Smith


SamWatts said...

This Jason Smith fellow misunderstands basic accounting. Now he's pretending to have reinvented economics with a math based model. He's taking the mathiness problem to an extreme. He wrote a recent post about Post-Keynesian economics in which he proved he has no idea what he's talking about. He even made a few basic math errors that Ramanan had to correct him about. It was hilarious. He doesn't even realize how stupid he looked.

Neil Wilson said...

It makes a change for a physicist to have economics envy.

Ryan Harris said...

+ Politics on every one

andy blatchford said...

How on earth can you do economics without politics? That's ludicrous.

Brian Romanchuk said...

The problem with his work is that I see almost no relationship with his back story ("information transfer!") and how he constructs his models with data fitting. There's a real possibility that all he has discovered is that you can take the logarithm of economic variables and get a fit relationship. He's either an unrecognized genius, or else he's going to be very unhappy when someone tells him the same thing has been done by hundreds of researchers who have gone wild with a times series database and an econometric software package. ("Data mining.") Frankly, I see no advantage to going through his work and finding the real answer.

Neil Wilson said...

It's all just curve fitting. We got the same level of excitement from people around the millennium when 'mechanical investing' was all the rage.

Some people still push the momentum investing line - Chris Dillow being the latest. So why aren't they living next door to Warren in the Virgin Islands?

Ignacio said...

Pretending that economics can be without politics. Ridiculous idea.

Market monetarists and new Keynesian are the most political active of the bunch, and quite reactionary too.

Neil Wilson said...

"Pretending that economics can be without politics. Ridiculous idea."

It's very popular because it tells a story that people want to hear: 'value free economic truths'.

Of course in reality the politics end up being embedded assumptions - because the whole of human relations is just politics.