Tuesday, March 11, 2014

Alarm about Academia

Mathematician Peter Woit has been blogging for years and has even written a book about the grip of ideas that don't work on the high energy particle physics community.

Economist Paul Krugman has been blogging about the ideas that don't work that grip the community of economists.

People have been pointing out similar problems in the American Academy of Religion,  specifically in the area of India studies, for more than a decade now.  After the recent withdrawal of Wendy Doniger's book in India, this criticism is renewed.  As usual, it is dismissed at best, as being tendentious, and more usually, as "Hindu fundamentalism".   Jakob de Roover,  a Belgian, wrote this about the hold of orthodoxy in India studies, in 2010:
To someone who has no first-hand experience of the academic study of India in the US, it must be difficult to imagine the number of young scholars who say things like ‘this is what I really think, but I will not say it in public, because I’m up for tenure’. By the time they receive tenure, they have usually conformed to the orthodoxy.
What is both amusing and sad is the nonchalance with which the existence of a problem in India studies is brushed aside as though it is utterly inconceivable.   It is a matter of common psychology that one is not open to evidence about some situation if one considers the situation to be impossible. The purpose of bringing Woit and Krugman is to try to get it across that one has to consider it to be possible, even if improbable.  Once one is open to the possibility, one might become open to evidence.

Below, you will find excerpts from just about six months worth of Krugman's blog posts.  Read it and think of the grip of an orthodoxy (not sure what else to call it) that Krugman writes about.

August 27, 2013, 11:39 am
The Real Trouble With Economics

No, the problem lies not in the inherent unsuitability of economics for scientific thinking as in the sociology of the economics profession — a profession that somehow, at least in macro, has ceased rewarding research that produces successful predictions and rewards research that fits preconceptions and uses hard math instead.

October 21, 2013, 2:02 pm
Maybe Economics Is A Science, But Many Economists Are Not Scientists

The point is that while Chetty is right that economics can be and sometimes is a scientific field in the sense that theories are testable and there are researchers doing the testing, all too many economists treat their field as a form of theology instead.

October 26, 2013, 9:43 am
Macrofoundations (Wonkish)

John Quiggin has a fun post debunking the notion, all too common among economists, that macroeconomics — the study of inflation, depressions, and all that — is somehow flaky and unworthy of the field’s grandeur, that only microeconomics, derived rigorously from rational behavior, is real science. Keynesian macro, in particular, is often regarded with intense distaste, and a lot of economists would like to ban it from the field.

November 13, 2013, 5:07 pm
Keynesian Economics and the Journals

Keynesian models — even New Keynesian models — remain hard to get past referees.
But look at who we’re talking about here. We’re not talking about dumb politicians who still do sort of Keynesian stuff. We’re talking about people like Olivier Blanchard and Janet Yellen — smart economists with plenty of technical knowledge and credentials, who continue to find Keynesian concepts useful even as such concepts are rarely published in academic journals. And it’s not just the people at the top: there’s a lot of Keynesian stuff going on in the research departments of these institutions.

So consider two hypotheses. One — which Cochrane appears to believe — is that being inside the Beltway has rotted Janet’s and Olivier’s brains, not to mention that of all their researchers, causing them to revert to primitive concepts that “everyone” knows are false. The other — which is what I hear from young economists — is that there is an equilibrium business cycle claque in academic macroeconomics that has in effect blockaded the journals to anyone trying to publish models and evidence that stress the demand side.

Obviously you know which story I believe. The main point, though, is that trying to argue from authority is even sillier here than in most situations. There’s a huge difference between “nobody believes that” and “none of my friends will let that get published in the journals they control”.

November 27, 2013, 11:19 am
The Trouble With Economics Is Economists

The problem, of course, is that this wasn’t just a case of ignorant or bull-headed political appointees ignoring economic wisdom: many prestigious economists were all too eager to turn their backs on standard macro, even when it was working very well, on behalf of their political leanings.
And that, I think, says that there is something wrong with the structure of the economics profession. We don’t seem to need different economics as much as we need different economists.

December 13, 2013, 10:12 am
Rudi Dornbusch and the Salvation of International Macroeconomics (Wonkish)

Notice that this isn’t the evil Krugman talking; it’s the respectable Rogoff. Yet he too is in effect describing neoclassical macro as a sort of cult, actively suppressing alternative approaches. What he gets wrong is in the part I’ve elided with my “…”, in which he asserts that this is all behind us. As we saw when crisis struck, Chicago/Minnesota had in fact learned nothing and was pretty much unaware of the whole New Keynesian enterprise — and from what I hear about macro hiring, the suppression of ideas at odds with the cult remains in full force.

December 14, 2013, 11:19 am
The Neo-paleo-Keynesian Counter-counter-counterrevolution (Wonkish)

Among economists who are actually looking at recent events, not doing a see-no-Keynes, hear-no-Keynes, speak-no-Keynes act, there has been a strong revival of some old ideas in macroeconomics. It’s not just new classical macroeconomics that’s in retreat; we’re also seeing, within the Keynesian camp, a distinct if polite rise of neopaleo-Keynesianism.

December 20, 2013, 3:14 pm
Microfoundations and the Parting of the Waters

But many economists had so committed themselves to the idea that Keynes was dead and rationality roolz that they simply dug in deeper. Rationality-based microfoundations must be right; if their microfoundations couldn’t explain why nominal shocks have real effects, then nominal shocks must not have real effects – it’s all real shocks. And so real business cycle theory was born.
There are, it’s true, some hints of a guilty conscience – as Matt Yglesias points out, there’s the odd tendency of freshwater types to immediately accuse anyone with saltwater ideas of being dishonest.
So there’s a lot of history here; but the main driver behind this history was, I believe, the inability of many economists to accept the fact that they took a wrong turn.

December 21, 2013, 2:04 pm
Uber and the Macro Wars

Can you live with that reality, and accept the notion that not everything you put in your model has microfoundations? If you can, you’re a saltwater economist, in some sense a Keynesian. If you can’t, you’re part of what has gone wrong with the field.

December 31, 2013, 11:42 am
Jean-Baptiste Say, Cockroach

A cockroach idea is a bit different: it’s an idea whose wrongness is so obvious, once pointed out, that the people who stated it claim that they did no such thing — so that at first you think you have a weasel problem, but at least the cockroaches are gone. Next thing you know, however, the roaches have invaded all over again.........

I was alerted to the fact that we were living in a Dark Age of macroeconomics when the same cockroach put in an appearance at the University of Chicago.

January 12, 2014, 2:13 pm
The Anti-Scientific Revolution in Macroeconomics

So let me summarize: we had a scientific revolution in economics, one that dramatically increased our comprehension of the world and also gave us crucial practical guidance about what to do in the face of depressions. The broad outlines of the theory devised during that revolution have held up extremely well in the face of experience, while those rejecting the theory because it doesn’t correspond to their notion of common sense have been wrong every step of the way.

Yet a large part of both the political establishment and the economics establishment rejects the whole thing out of hand, because they don’t like the conclusions.

Galileo wept.

January 23, 2014, 10:43 am
Everything New Is Old Again

But will this sweep the academic world? No. Partly because of politics: as Quiggin says, new classical economics is effectively part of the broader right-wing apparatus of denial, into which awkward facts rarely penetrate.But there’s also a professional dynamic going on.

You see, both the Keynesian revolution and the classical counterrevolution had one great virtue for ambitious academics: they involved both new ideas and more elaborate math than their predecessors. (It’s often forgotten, but Keynesian economics and the Samuelsonian modeling revolution went hand in hand.) New Old Keynesian economics, on the other hand, involves turning away from hard math back toward rough-and-ready assumptions based on empirical observation. Aspiring up-and-coming economists may be able to publish empirical papers in this vein, but theoretical analyses are likely to be met with giggles and whispers. Just because the stuff works doesn’t mean that it will be publishable.

So I think we’re in for a long siege in which the economics that works remains virtually absent from economic journals (except policy journals like Brookings Papers) and largely untaught in graduate programs.

I hope I’m wrong.

January 25, 2014, 2:32 pm
None So Blind, Macroeconomics Division

Seriously: if this were a normal scholarly field, can you imagine a large part of the profession not only ignoring this evidence but doing all it could to excommunicate anyone trying to face reality? And no, I’m not engaged in hyperbole: remember, it was Ken Rogoff, not me, who wrote about bearing the scars of “new neoclassical repression.”

February 9, 2014, 7:57 pm
The Excluded Middlebrow (Wonkish)

It used to be that someone who wanted to make sense of real-world phenomena could sketch out a rough, ad hoc model derived from plausible behavioral assumptions, and use that model to shape the interpretation of empirical results. These days, however, you’re not allowed to publish stuff like that.
February 10, 2014, 11:11 am

Macroeconomic Winners and Losers (Implicitly Wonkish)

John Quiggin looks at a recent book that purports to explain the big ideas in macroeconomics, but doesn’t contain any, well, macroeconomics. His meditation on how that can happen involves a useful take on what happened to the profession in the decades that preceded the 2008 crisis, and a very interesting take on the current state of affairs (DSGE is “dynamic stochastic general equilibrium” — basically, the particular form of modeling that is more or less the only thing one can publish in journals these days):

Broadly speaking, as far as academic macroeconomics is concerned, DSGE has won the day, not so much by force of argument as by maintaining control of the criteria for publication of journal articles in the field: it’s OK to assume full employment, and ignore inflation, but not to omit rigorous microfoundations for your model. On the other hand, with the collapse of the intellectual case for austerity (though not its political dominance), the terms of public debate are set almost entirely by New Old Keynesians like Krugman and DeLong (that’s true, even if you don’t believe, as I do, that the outcome of that debate has been a knockout win for the Keynesian side).

February 16, 2014, 4:54 pm
Fighting the Last Macro War? (Slightly Wonkish)

...a large part of academic macroeconomics is dominated by real business cycle theorists — and to the extent that their work is motivated by any real economic problems, it’s still about the stagflation of the 1970s....