17 Feb 2014

I Agree With Krugman in Both Spirit and Letter

Economics, Krugman 11 Comments

You think I’m being sarcastic, but I’m not. I really like this post where Krugman argues:

In my field there is indeed a problem with abstruseness, with the many academics who never even try to put their thoughts in plain language.

And what is the nature of that problem? It’s not that laypeople don’t understand what the academics are saying. It is, instead, that the academics themselves don’t understand what they’re saying.

Don’t get me wrong: I like mathematical modeling. Mathematical modeling is a friend of mine. Math can be a powerful clarifying tool. So, in some cases, can jargon…

But it’s really important to step away from the math and drop the jargon every once in a while, and not just as a public service. Trying to explain what you’re doing intuitively isn’t just for the proles; it’s an important way to check on yourself, to be sure that your story is at least halfway plausible.

Obviously, some Austrian purists may quibble with me and say that they don’t like anybody giving any quarter at all to mathematical economics. But I’m trying to give credit to Krugman when it’s deserved, to show I am a fair guy.

I also like his specific illustration:

Take real business cycle theory – I know it’s a horse I beat a lot, but it’s not dead, and it’s a prime example within economics of what I have in mind. I still want to spend at least some time explaining that theory to my undergrads, so I’ve been looking for a simple, intuitive explanation by an RBC theorist of what’s going on. And I haven’t been able to find one!

I mean, I could do it myself. Strip the story down to basics…As I’ve written before someplace, it’s the story of a farmer who stays inside when it’s raining and puts in extra hours when the sun is shining.

But the RBC theorists never seem to go there; it’s right into calibration and statistical moments, with never a break for intuition.

Yep. That’s what happened to me in grad school (though in fairness, I don’t think any of my professors actually believed RBC). I distinctly remember sitting in the study room off the computer lab, going over a problem set where our job was to look at the “impulse response function” from a productivity “shock.” I put down the pencil and asked the other people at the table, “Does anybody know what the heck this actually means?”

No one said anything at first, and then the guy from Catalonia said, “No I just like playing with GAUSS” (which was the name of the econometrics software).

11 Responses to “I Agree With Krugman in Both Spirit and Letter”

  1. Tony N says:

    I disagree wholeheartedly, and for the following reason:


    I rest my case.

  2. Chaddery says:

    I’m sure Krugman will return the magnanimous gesture in his next NYT hatchet piece. I’m also sure he’ll refer to Hayek’s explanation on why it “rains” and why it “shines.” .

  3. Major_Freedom says:

    “It’s an important way to check on yourself, to be sure that your story is at least halfway plausible.”

    If plain language is required, or at least the best method, to ensure that our convictions are plausible, then is this not the same thing as saying what Austrians have always said, that economic thinking and explication is best expressed in plain language?

    I mean, Krugman didn’t say something like “Every once in a while, plain language economists should translate their convictions into mathematical jargon, to ensure in their own minds that their stories are plausible.”

    • Ken B says:

      No it’s not the same, because you said ‘best’.

      • Major_Freedom says:

        Why didn’t PK then tell us about the best method to ensure our stories are plausible, which you are inferring is not plain language?

    • Matt M (Dude Where's My Freedom) says:

      Yeah, Krugman is trying to make himself appear “fair and balanced” here. He says that math and jargon are great, but “every once in a while” economists should use plain language too.

      Presumably, he also believes that plain language is great, but every once in a while, economists need math and jargon too, which immediately disqualifies Austrians who attempt to speak in plain language all the time.

      • Matt G says:

        Krugman actually agreed with Caplan that the vast majority of economath is a waste of time, although with the caveat that he did find math useful once or twice earlier in his career.

        I’ve never delved deeply into economath, but it sounds like it could be a useful tool to ensure the correctness of your reasoning, with the risk that you forget what you’re actually doing and the temptation of adopting mathematically convenient but implausible simplifying assumptions.

        I find practical arguments such as this more convincing than what you hear from certain corners of Austrianism, e.g. “human action can’t be quantified!”

  4. Ken B says:

    You mean like Green’s functions and convolving a delta function and all that?

    (And yes I know delta isn,t actually a function.)

  5. Silas Barta says:

    Wow, for once I’m in strong agreement with Krugman.

    Interestingly I’ve also been writing up a long explanation about what a real vs superficial understanding looks like.

    Ironically the prime example involves understanding of long multiplication!

    Double ironically, one of my examples of a bad understanding is an economist who can’t explain the intuition behind tax interaction effects beyond “that’s what the model spits out!” [/fightinwords]

  6. andrew' says:

    I don’t agree with him any all. He even condedcendingly labels stuff (wonkish). They are separate things.

    And try to get a keynesian to explain why is peak gdp is correct GDP or get a mmt’er to explain in plain language why the money illusion doesn’t work during the boom.


    • andrew' says:

      He never let’s an opportunity to be a db sneak away. I don’t fault people for econ being hard. I fault hubris.

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