Friday, August 19, 2016

Matias Vernengo — Noah Smith on heterodox models

Matias deftly takes down Noah contra heterodoxy as not knowing what he is talking about. To cut to the chase, read this. It's short and has some good references, too.

Naked Keynesianism
Noah Smith on heterodox models
Matias Vernengo | Associate Professor of Economics, Bucknell University


Matt Franko said...

This is a bit of a cop out from MV: "Not everything can be formalized."

Tom Hickey said...

Mathematical formalization requires quantification. As MV says, a lot of relevant information econ is qualitative. It's also normative in addition to being descriptive. Then there is uncertainty.

Beyond that there are measurement and estimation issues, e.g., "the natural rate of interest," "the natural rate of employment," "capital," "return on capital," "inflation," "inflation rate," and so on. IN addition to that, there are the issues with cet. par. There is also cognitive-affective bias and ideology to deal with.

It's impossible to have a pure formal system outside of mathematics. As soon as math is applied there are conceptual issues involved, beginning with presumptions and hidden assumptions, even before assumptions.

Is there even one economics paper with no conceptual content in it, only equations?