Saturday, July 10, 2010

Assault of Thoughts - 7/10/2010

"Words ought to be a little wild, for they are the assault of thoughts on the unthinking" - JMK

- First and foremost, happy birthday to my lovely wife, who I don't think reads this blog but might drop by from time to time.

- Perhaps Ed Prescott's Nobel Prize should be revoked... this goes beyond "gee - regime uncertainty is important" (indeed it is). This is blind dogmatism masquerading as economic analysis. We have enough of that as it is.

- Economic Thought continues to put out good stuff. Mattheus has a very interesting looking post that I've only gotten a chance to skim rather than look at in detail, covering the significance of the synthetic a priori for economics. I'm going to revisit that more thoroughly and you should too. Jonathan has a nice, fair, nuanced review of this ongoing discussion of all economics being a footnote to "Keynes vs. Hayek".

- And on Keynes vs. Hayek, Krugman comes belatedly to the 1932 letters that Mario Rizzo has been circulating. He's characteristically more blunt where I probably should have been initially. I usually have the approach of "Hayek had some incredibly important things to say that people can't just dismiss, and Keynes was really right on X, Y, and Z, and you're wrong to say he wasn't". What I should make more of a point of adding is "diagnostically, I think Hayek was simply wrong on the Depression, despite all the other fantastic insights he had". Krugman does the job for me.

- Come on - nobody likes a poseur. Certainly not one that critiques such low-hanging fruit as "authoritarians".

- It's hard to beat Brad DeLong when it comes to blogging the history of economic thought. This is a post on Karl Marx's real business cycle connections. This reminds me of another point I wanted to make about Garrison's book. Garrison dismisses virtually all non-Austrian 20th century economics, and he frames monetarism, New Classicism, and real business cycle theory as natural evolutions of Keynesian theory. The assertion is absurd. New Classicism was a response to Keynesianism perhaps, but it was a fundamentally classical rejection of Keynes's rejection of classicism. The idea that it was part of what Garrison calls the "Keynesian spur" is beyond ridiculous. It was a rejection of Keynes, not a continuation of him. Garrison's framing of the issue is bassackwards.

- Mark Thoma cautions against expecting miracles from monetary policy.

700 some items on the blog-roll waiting for me when I came home distilled to this list of gems. Not bad, Daniel. Not bad. Not even looking at anything Andrew Sullivan or Matt Yglesias posted over the course of the week helped a lot.

8 comments:

  1. It's rather an embarrassment for Krugman that he's never heard of these letters, isn't it?

    Or that Krugman had no idea that "Keynesian economics" pre-dates 1936. Any economist remotely informed about the history of economic thought knows this stuff.

    Krugman didn't.

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  2. You're working way to hard to misread Garrison.

    Garrison is talking about the science and the evolution of theory.

    You seem unable to get your eye off politics.

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  3. The comments on Economic Thought's "Keynes vs. Hayek" deal very little with either economist. It's just really a disagreement between Jonathan and myself on interpretations of money and the paradox of thrift.

    Also, glad you're a fan of philosophy. Drop a comment on mine.

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  4. Anonymous - Garrison argues that New Classicism follows from Keynesianism. It's a ridiculous claim, and it has nothing to do with politics. It is, however, a nice way to wrap all the theories he disagrees with up together and put a nice little bow on it.

    Generally I'm liking Garrison - don't confuse a few disagreements with a negative disposition towards him.

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  5. I liked authoritarians ... and it is far more accurate than the cartoon inspired it.

    What, no links on Obama supporting DOMA?

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  6. Didn't even notice his support - and it's not really an issue/subject I post on much.

    Do you have a blog? Maybe you could post on it.

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  7. I don't see a lot of difference between New Classicism and the theories of Keynes. It's just that Keynes wasn't very clear on some aspects, and New Classicism entered the scene to clarify them. It is a natural evolution. It and New Keynesian are two evolutionary paths from Keynes.

    And DeLong is not very good when it comes to economics and history (or economic history), but you will think that if you have a Phd from MIT in economics, in which case no one hires you for what you know, but for that piece of paper. Marx was not the first to see those problems, but he also made a lot of glaring mistakes. Take this from the DeLong's quote:
    [S]ince market and production are two independent factors
    They are not.
    I am familiar with Prescott's cycle theory and I don't see anything in it resembling Marx. Marx was actually closer to the Austrians. He actually knew about stages of productions, which would make smarter than 70% of the current economic profession (I'm an optimist), but because he took the ricardian theory of value to its logical conclusion, he constructed a brilliant, very dangerous and ultimately wrong system.

    PS: You really need to brush up on your economics.

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  8. You really need to brush up on your economics.

    I certainly do. My current plan is to continue brushing up on my economics until I leave this Earth.

    If you really think there's not much of a difference between Keynes and New Classicism you could probably brush up too.

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