The Krugman/Sumner Showdown–In Layman’s Terms
The blogosphere has been abuzz (though nothing compared to the Great Debt Debate of 2012) with activity centered on whether the year 2013 provided a good test of the economic views of Keynesians like Paul Krugman versus Market Monetarists such as Scott Sumner. These things often get bogged down in technical minutiae. In the present post, therefore, I will crystallize the essence of the dispute in simple terms for the lay reader.
THE KRUGMAN/SUMNER SHOWDOWN
The scene opens with Paul Krugman and Scott Sumner parading around the floor of the arena, surrounded by thousands of cheering and bloodthirsty fans. Both men are adorned with giant peacock feathers.
KRUGMAN: I am the manliest man on the Internet.
SUMNER: No, I am the manliest man on the Internet. That’s what the consensus of my peers tell me, and that’s what it means, after all, for a statement to be true.
KRUGMAN: I propose we settle this by armwrestling.
SUMNER: I’m not sure that that’s the best test, but I accept your challenge.
The men sit at a table and begin the match. At first Krugman appears to have the upper hand, as he pushes Sumner’s arm halfway down to the table surface.
KRUGMAN: It’s not looking good for you, is it Scott? Those Twinkies you’ve been eating seem to be taking their toll.
Sumner then twists his wrist, and pushes Krugman’s hand back toward the starting point. Then he quickly slams it down to the table. Sumner jumps up from the table, lifting his hands in celebration, bowing to the crowd and casting suggestive glances at Matt Yglesias.
KRUGMAN: What? Why is everyone cheering? What’s going on?
Krugman sneaks up behind a triumphant Sumner, winds up, and kicks him squarely in the groin. The Keynesians in the crowd erupt with applause, while the Market Monetarists begin booing.
BRAD DELONG (jogging out from the stands to the middle of the arena): Perhaps I can be of assistance? In my opinion, this has been a draw. The real test of manliness would have checked which gladiator could grow the best beard. Since they both shaved this morning, we just don’t have enough data. I realize the Sumner fans are claiming victory, but damned if I can see why.
NOAH SMITH (who had followed DeLong the whole way to the center of the arena, much as a puppy might): I must concur with Referee DeLong. Now in fairness, it is true that Gladiator Krugman suggested the armwrestling. But I must strongly object to the tactics of Gladiator Sumner. I mean, are you wearing a cup or something, for armwrestling? Who does that? Paul could’ve broken a toe.
SUMNER: Mark Sadowski…go get me my gun.
KRUGMAN (hopping out of the arena on one foot): This is no longer a mere match of manliness. This has now become a test of character!
Curtain.
Bob Murphy at his very best.
You forgot the part where Sumner turns his baseball cap around to “turn on the switch.”
http://www.youtube.com/watch?v=kvB2RW9i7w0
Except I never watched that movie.
Ha! I had the same thought.
Okay, that, that right there? Hilarious.
Then go forth, sir, and heal thyself; bathe your soul in its sumptuous radiance.
I might need to mail you a copy for your birthday.
Puppy? I prefer “canine executive assistant”, thank you very much.
A squire’s work is never done.
This post was pretty damn awesome, btw.
1. Bob Murphy is clearly the manliest on the internet, let’s just put that out there.
2. Brad DeLong – as is often the case – is clearly correct. You want to know why this didn’t create as much heat as the debt debates? Because the debt debates were actually debating substantive. I think most people know this Konczal announced test and the eager Krugman endorsement was not the test it was purported to be. If it were, macro empirics would be a hell of a lot easier than they are.
3. DeLong’s last sentence is very important. We should all downgrade our view of anyone claiming victory on this. If you want to call early 2013 Krugman sloppy in his endorsement of the test by all means do that (although he had some qualifiers, if I recall… I’d have to revisit). But you cannot claim victory unless you agree it’s a good test, and if you actually think it’s a good test you are probably confused about the empirical issues involved here.
DK wrote:
DeLong’s last sentence is very important. We should all downgrade our view of anyone claiming victory on this. If you want to call early 2013 Krugman sloppy in his endorsement of the test by all means do that (although he had some qualifiers, if I recall… I’d have to revisit)
Daniel, Krugman kicked Sumner in the balls. Stop defending him, or anyone else defending him.
If you guys all said, “Oh my freaking gosh, Krugman what the hell is WRONG with you man??!?! But anyway, this really doesn’t mean Sumner is right…”
then nobody would be flipping out. I DON’T think Scott’s views are right, after all.
Wait you are flipping out about my perspective here?
I’ve (1.) always said Konczal/Krugman’s test was dumb and (2.) the MM victory lap was dumb.
Aside from the recent claim on my part that you are the manliest on the internet and some arm chair psychologizing about people’s motives in the victory lap in that last comment, those are basically the only two views I’ve expressed on this thing. Certainly they are the two views I’ve expressed with the most frequency.
Isn’t that precisely the two positions that you said no one should flip out about?
So why are you flipping out?
Go read Sumner blog, he did not do a victory clap. He agrees that it was a bad test.
But that not the point krugman said it was a test and its fair for the MMs to say the passed, even threw the them self thought it was a bad test.
When did you start saying it, Daniel?
Do I need to emote more that he made a bad empirical claim?
It would be too exhausting to get that emotional every time that happened.
Do I need to emote more that he made a bad empirical claim?
!!!! No Daniel, you need to acknowledge that when he thought he would win, he said it was a good test, and then when it would make him lose, he said it was a bad test.
And that DeLong and Noah are playing dumb, as if they don’t see this.
Or maybe they’re not playing.
Oh I think it’s much more likely he pounced on a declarative post from Konczal. Krugman is not a mild mannered or sit-on-the-fence kind of guy. He makes big, big claims that are ill-advised all the time. This is one of them.
I don’t think there’s any clear reason to think there was anything more intentional about this.
Remember, I think Krugman early 2014 has his head screwed on right. He is expressing the doubts I was expressing in early 2013. And he’s clearly smart enough to GET those arguments, so the more obvious interpretation is that Krugman in early 2013 was rash.
DK wrote:
…so the more obvious interpretation is that Krugman in early 2013 was rash.
More obvious than what?
Daniel, are you saying that even if unemployment had shot up to 13% by December, that Krugman would have written the exact same post in January 2014? I’m trying to understand how your interpretation is different from mine.
No, if it had shot up like that I’m sure he’d be inappropriately dancing on MM’s fake grave.
Like I said, he can be impulsive. He can be rash. I think reality confronted earlier rash statements and he made a very reasonable assessment in early 2014. I didn’t read the whole conversation, but the snippet I saw is essentially the concern I have raised since early 2013.
I do not think he is saying what he says based on its outlook for his position. I think some things he says just because he’s impulsive sometimes. It’s less fun to write that we have to wait many years for carefully identified models.
If all you’re saying is that he is more likely to take a step back when rash comments have been put under the limelight, sure. I think most people are like that.
DK wrote:
No, if it had shot up like that I’m sure he’d be inappropriately dancing on MM’s fake grave.
…I do not think he is saying what he says based on its outlook for his position.
Daniel, please reconcile these two statements for me. You agree that when the (bad) test failed, Krugman came around to seeing why it was a bad test after all. You also say that if the (bad) test had worked in Krugman’s favor, he never would have seen the light, but would be jumping for joy at his (false) victory.
But you’re saying this is just a coincidence, and has nothing to do with Krugman only seeing the light when it helps him out?
You are very fixated on this “we have to point out Krugman says questionable things sometimes” point. I was saying it was a questionable test months ago. What’s happened RECENTLY that my attention is understandably more focused on is the questionable claims made around the victory lap for MM.
I don’t think he is covering his ass. I think it made him stop and think harder about it. If he didn’t run into that impetus to stop and think he probably wouldn’t have.
“But you’re saying this is just a coincidence, and has nothing to do with Krugman only seeing the light when it helps him out?”
I think all people try very hard to reconcile their mental models with reality. If he doesn’t feel any reconciliation work is in order he’s not going to put extra thought into it.
Doesn’t that seem reasonable? It’s why we have peer review and don’t tell editors that we super duper promise we thought about it really hard.
You seem to be making a much bigger claim, but perhaps I was reading you wrong.
DK,
Are you suggesting that it would be a good idea for Krugman’s blog posts to be peer reviewed, in order to help protect him from looking like an idiot?
If so, it looks like we finally agree on something!
I think most blogs would benefit from that… but then again, that’s what other blogs are for!
DK.. “You are very fixated on this “we have to point out Krugman says questionable things sometimes” point. I was saying it was a questionable test months ago.”
You are fixated on covering Krugman’s ass.
Yeah, I suppose, when you really get down to it, Free Advice is really “Free Fact Checking for Krugman” (plus the occasional karaoke video)
KUEHN: Well of course Krugman is prone to confirmation bias, an understandable and totally unsurprising aspect of human cognition. Why all the outrage?
Not actually what Kuehn says – surprise, surprise.
As a public intellectual I think we should hold him to a different standard. I’ve griped on multiple occasions about his tendency to make poorly identified causal claims, from shoddy scatterplots to stuff like this. He’s a smart guy – he’s not always bad. Sometimes he makes the point that the causal claim is hard, but sometimes he’s not so careful.
But by all means, keep acting like a dumbass that sees the world through black and white. Kuehn = bad guy. I hope that works out for you.
“But by all means, keep acting like a dumbass that sees the world through black and white. Kuehn = bad guy.”
Krugman is the guy who frequently devotes his public commentary to black and white demonizing of the “bad guys”.
You and Murphy, on the other hand, make clear efforts to give the “other side” a fair consideration, which is why I read your blogs. Thank you.
Matt M – no offense to Bob (I like the blog a lot), but I don’t think the Krugman posts are generally very strong.
As opposed to the religion posts, the evolution posts, the Ron Paul posts, the Lincoln hating posts, the pacifism posts, or the conspiracy posts?
Stating that Krugman was wrong is not a victory lap, my friend, is simply stating the obvious! Sumner at least has repeatedly stated 2013 was not a definitive result.
How about some links from April and May 2013 demonstrating which people knew that?
Pretty accurate summation.
Krugman wins via outperforming a hypothetical baseline scenario in which he in which he was defeated even more decisively by Scott.
Counterfactuals, Bob. Counterfactuals.
Paul: The Titanic is unsinkable.
Scott: No way. One good iceberg and she’s history.
Paul: Hater!
*Titanic sinks*
Scott: See, told you so.
Paul: Not so fast, we can’t be sure it was an iceberg that did her in.
Scott: Oh no?
Paul: No, it could have been a number of other things.
Scott: Why you…
Sort of like the current debate. The Titanic is Krugman’s austerity-bomb prediction and monetary offset is the iceberg. Everyone is so worried about what caused the ship to sink that they’ve ignored the fact that it sank in the first place.
Out of curiosity – you have Scott saying it’s not the best test here. Did he actually say that or was he just as enthusiastic about it as Konczal? Honest question – I don’t follow Scott as closely as you.
Daniel–I have not gone back and verified it. Scott has been claiming that he never said it was a great test, because he is a “we don’t need to wait and see” guy. So that makes sense (i.e. it would have contradicted his other writings if he had ever said that “We should look back in late December 2013 and see how MM did”), but I didn’t go back and check. And, for what it’s worth, when I first wrote on this (in the “Krugman Confirms Sumner’s Whole Point” post), I said that Scott had said 2013 would be a good test.
I agree with Bob M. here — even over Daniel K. Here is my analogous take….
Krugman: The only gun that can kill anyone at the zero bound is the M-16
Sumner: The AK-47 can also kill someone at the zero bound.
Krugman (rashly): 2013 will be the year to test this.
(2013Reality: Many people die from AK-47 wounds.)
Sumner: See I told you that an AK-47 can kill all the people you need (with celebration).
Krugman: It’s wrong to say that M-16’s don’t matter when it comes to killing people.
(Sorry about the non-pacifist take on the analogy.)
“can also”
So Sumner thinks fiscal policy can work at the zero lower bound but monetary policy also can?
I could have sworn that was Krugman’s position and Scott was the one saying only one thing would work!
Krugman has been clear that he believes monetary policy is not effective at the zero bound. This was the definitive statement and the definitive 2013 challenge IMO.
I think talking about Sumner’s views on fiscal policy is changing the subject. (I guess that’s why my analogy also has Krugman changing the subject at the end.)
Krugman said IN THE KONCZAL POST ITSELF that monetary policy could work at the zero lower bound.
How is it changing the subject? The subject is Krugman and Sumner on monetary and fiscal policy, no?
No. The subject is Krugman and Sumner in ridiculous plumed costumes. Eye on the ball, Daniel.
No, the subject is the 2013 test. Here are Krugman’s words from the Konczal post…
“But as Mike Konczal points out, we are in effect getting a test of the market monetarist view right now, with the Fed having adopted more expansionary policies even as fiscal policy tightens”
and
“Sorry, guys, but as a practical matter the Fed – while it should be doing more – can’t make up for contractionary fiscal policy in the face of a depressed economy.”
To say that as a practical matter the Fed will not be able to engage in enough monetary action to get us out of the slump is not the same as saying that monetary policy is ineffective at the zero lower bound. Krugman does support unconventional monetary policy at the zero bound.
Anyway – I was quoting your post and pointing out that that was a funny thing to be putting in Sumner’s mouth.
Sumner is the one saying only one kind of gun can kill people after all.
It seems to me you are able to discern the nuanced Krugman view of monetary policy at the zero bound despite his many black and white statements on the subject. It’s strange that you don’t allow for the same degree of subtly within the context of the Sumner rejection of fiscal policy.
Krugman may sometimes say that monetary policy is ineffective at the zero lower bound, but what he means is *conventional* monetary policy (buying short-term treasury securities). But he does believe in the effectiveness of unconventional monetary policy.
re: “It seems to me you are able to discern the nuanced Krugman view of monetary policy at the zero bound”
I’m getting sick of this bullshit. Stop being lazy and read the actual posts that Bob links to. Krugman writes this (is THIS nuanced?):
“I’m not claiming that there is nothing the central bank can do; but as I’ve tried to explain before, monetary policy can, for the most part, gain traction under current circumstances only by changing expectations about future actions (and changing them a lot). “
Economics is also not just some hobby. It’s a serious science. If you want to prognosticate about what Krugman thinks about monetary policy at the zero lower bound, get off your ass and pick up the BPEA and the QJE because that’s where he’s written about it at length.
You are LUCKY Krugman also blogs and clearly says without any nuance that monetary policy works at the ZLB. Scientists are not under any obligation to do that. Usually you’d have to go to the BPEA or the QJE if you’re curious.
Stop being lazy and insulting other people for your own personal failings.
“it’s a serious science”
I thought Dr. Murphy’as post was funny, but once again, Daniel,you beat him.
Dr. murphy’s post
You need to learn to read more carefully. My insult is clearly directed at your lack of reading and understanding SUMNER. I was merely prefacing the insult by noting you have no such problem with Krugman.
The you go off on your long, hysterical, and irrelevant diatribe.
You, sir, are a waste of a good insult.
Good day!
In the post where Sumner ‘goes to get his gun’, he says this:
Does anyone know what he means here?