17 Dec 2012

Stephen Williamson Doesn’t Think He’s in a Cult

Daniel Kuehn, Economics, Krugman 15 Comments

This made me chuckle. Here’s the opening portion of a blog post by Stephen Williamson:

I thought I would offer some light entertainment today. This Paul Krugman post struck me as perhaps more deranged than usual on the topic of macroeconomists.

Here are the two closing paragraphs, to give you the idea:

In fact, the freshwater side wasn’t listening at all, as evidenced by the way 80-year-old fallacies cropped up as soon as an actual policy response to crisis was on the table; and as for changing views in response to facts, well, we all know how that has gone.

The state of macro is, in fact, rotten, and will remain so until the cult that has taken over half the field is somehow dislodged.

Like most of the macroeconomists I know and talk to, I try to keep up with my field, and with what is going on in the rest of economics. That’s a hard thing to do of course. It burns all the time that is left after teaching students, trying to do one’s own research, and doing whatever else we need to do to get on with life.

It doesn’t surprise me that Paul Krugman isn’t up on what is going on in macroeconomic research. Why should we expect him to go to macro conferences, spend time in seminars, and talk to his colleagues at Princeton? He has plenty on his plate, what with delivering two NYT columns per week, blogging, talking to pundits, and giving speeches. But if he’s not up on the field, what purpose does it serve to make up outlandish stuff for people to read? Maybe this just motivates the Krugman base. I have no idea.

HT2 Daniel Kuehn, who of course is upset that Williamson isn’t being fairer in his treatment of Krugman in this exchange.

15 Responses to “Stephen Williamson Doesn’t Think He’s in a Cult”

  1. Daniel Kuehn says:

    Not upset!

    I will be upset, though, if the sun sets without you getting how goofy the Williamson post was. Here’s another attempt: http://factsandotherstubbornthings.blogspot.com/2012/12/more-on-williamson.html

    • Ken B says:

      Daniel, didn’t we just discuss in another thread how you can comment by not commenting. And in this case Bob did comment — read the title again. Who exactly imagines he’s not in a cult? Not PK. Are you quite quite sure Bob is endorsing SW?
      Imagine I put up a post about Bob criticizing Islam for being irrational and mystical …

      • Anonymous says:

        I’m not sure he’s endorsing Williamson in toto, but based on the way he responded to my post, I think he thinks Williamson has a point about Krugman.

        • Ken B says:

          He does.
          Look, Bob says this made him chuckle. Is it a joke? No, it’s irony.

          When Bob posts “Islam is ridiculous, it’s all out of this crazy old book filled with rage and fables!” you’d expect me to link it with a chuckle wouldn’t you?

      • Daniel Kuehn says:

        I’m not sure he accepts all of Williamson, but based on the comment on my post I think he thinks Williamson has a point w.r.t. Krugman.

    • Keshav Srinivasan says:

      Daniel, I don’t think you’re getting the definition of Freshwater right. Here is one of Krugman’s posts on the subject:

      “But by 1980 or 1981 it was basically clear to everyone that the Lucas project – the attempt to explain the evidently Keynesian behavior of the economy in terms of nothing but imperfect information – had failed. So what were macroeconomic theorists supposed to do?

      The answer was that they split. One faction said, in effect, “OK: we can’t explain what we think we see in terms of full maximization. So we have to assume that there are some limits to maximization – costs of changing prices, bounded rationality, whatever.” That faction became New Keynesian, saltwater economics.

      The other faction said, in effect, “OK: we can’t explain what we think we see in terms of full maximization. So we must be interpreting the data wrong – things like changes in the money supply must not be driving recessions, because theory says they can’t.” That faction became real business cycle, freshwater economics.”

      Now it is true that Krugman is attacking the freshwater school for espousing fallacies like the Treasury View, but that’s not his definition of the school.

      • Daniel Kuehn says:

        Strict real business cycle theory – of the sort you are quoting him on here – is practically the definition of “demand denialism”, which is something I list along with the Treasury View and strict Ricardian equivalence.

        RBC gets a bad rep, in my view, but that’s another discussion. The sort of RBC people that he describes that think it’s all technology shocks is kinda sorta exactly what I’m talking about.

        • Matt Tanous says:

          I stopped paying attention to RBC when one of its proponents claimed the Depression was a result of people switching to cars…. 10 years after that really happened.

          • Major_Freedom says:

            Would you keep paying attention to someone who said that the stagnation of real wages since the early 1970s is due to a lack of technological innovation?

            • Matt Tanous says:

              That claim is even more laughable. Who made it? The only RBC proponents I have heard claimed that the various crises since 1970 were a result of various technological innovation “shocks”, namely with computers and other technologies.

      • Matt Tanous says:

        “the attempt to explain the evidently Keynesian behavior of the economy”

        “Evidently Keynesian behavior” must be code for “the Keynesians have no idea what the hell is happening”.

  2. Mike Sax says:

    So you think Krugman is terribly unfair about how he talks about Freshwater economists but you think Stephen Williamson is fair and even handed in how he talks about Krugman? Williamson suffers from KDS-Krugman Disorder Syndrome. There is never any shot too cheap to take when he’s discussing Krugman.

    You talk about what it takes to get us through life. I don’t know what SW would do if there wasn’t Krugman around to take potshots at.

    It’s not clear why because Krugman has a low opinion of Freshwater economists this makes him “deranged.” Indeed, SW is the deranged one-KDS-about Krugman. If his field is so great and he’s so comforable with the status quo why does Krugman bother him so much?

  3. Mike Sax says:

    When I hear the criticism of Krugman by you other Macro guys, what I think of is what they say about FDR: his enemies called him a “traitor to his class.”

    I think becasue Krugman is from the Macro establishment, other Macro guys like SW-and perhaps yourself-really resent when he runs down the field to the public-who most Macro guys see as being too simple minded to understand the profound truths of Macro

Leave a Reply