They're fractious, frequently wrong, and have lost much of the public's faith. But their insights are still valuable -- as long as you don't expect them to predict the future.The Atlantic
Should We Trust Economists?
Noah Smith | Assistant Professor of Finance, Stony Brook University
Imagine if your doctor or even your auto mechanic was this wishy-washy about whether they could help you or not...any normal person would look for a more competent one.
ReplyDeleteWhat I find irritating is the broad brush. People dont trust the quack orthodox and pk modellers. They are sort of a crackpot narrow slice of economists that occupy an abnormally large portion of policy making. Given their detachment from reality and poor performance they are being shunned. However other economists are basking in the sun and being engaged for simply being right. Some are even doing nice summer tours of italy by popular demand. Noah gave a speech to other modellers at a central bank. Interesting.
ReplyDelete@paul,
ReplyDeleteI agree with you and I go one step further: Smith is deliberately setting goal-posts impossibly high, so that Keen cannot meet the mark.
This is where Smith's sleight of hand comes back to bite him: by those standards, nobody "saw it coming". Nobody.
Not even other mainstreamers whom Smith likes, like Paul Krugman (who also claimed to have "seen it coming").
But one can't see Smith lambasting and ridiculing these guys. Why not?
One word: sophistry.
@ magpie
ReplyDeleteThis could only be done in an ergodic system where conditions are time-invariant, and as a physics major Smith is smart enough to know that. He's asking heterodox economists to do what he knows that orthodox cannot because social systems are complex, emergent, non-ergodic, and time-variant. Moreover, in economic systems there is also the unpredictable factor of asymmetric knowledge and govt policy. For instance, Warren reported that he did not call the coming crash because he did not believe that govt would fail to act to head off disaster when it was clear that the big banks were in serious trouble.