Everything I know about macroeconomics I read on blogs
Is our macroeconomists learning?
By The Economist | WASHINGTON
VIA Felix Salmon, Gregory Clark writes:
Recently a group of economists affiliated with the Cato Institute ran an ad in the New York Times opposing the Obama stimulus plan. As chair of my department I tried to arrange a public debate between one of the signatories and a proponent of fiscal stimulus -- thinking that would be a timely and lively session. But the signatory, a fully accredited university macroeconomist, declined the opportunity for public defense of his position on the grounds that "all I know on this issue I got from Greg Mankiw's blog -- I really am not equipped to debate this with anyone."
Several things to note about this. One is that while most of Mr Mankiw's posting on stimulus has involved simple links and excerpts of anti-stimulus arguments, it's not clear that he'd actually oppose the Democratic plan if cornered in secrecy and forced to acknowledge political reality. Matt Yglesias made this point, in rather devastating fashion, amid a recent exchange of blog posts between Mr Yglesias and Mr Mankiw, and Mr Mankiw has yet to respond to him, one way or another.
Another point is that just because one macroeconomist doesn't feel fit to debate stimulus doesn't mean that all macroeconomists are similarly afflicted. There have been a number of very cogently argued columns written by sceptics and proponents of stimulus over the past few months.
But I think that in the end Mr Clark is too unkind to macroeconomists in general in suggesting that nothing has been learned since the Great Depression. There has been quite a lot of development in the relevant fields in recent decades, much of which was done by participants in the current debate (including Mr Mankiw). The problem is that events of this severity come along too infrequently. When a shock sufficient to include in the sample happens only once every eighty years or so, it is hard to advance the science.
Essentially, severe crisis occurs, economists theorise for nearly a century, testing their ideas on such middling downturns as are available, and then another crisis occurs. If macroeconomics is still as vague and lost in ten years as it seems to be now, then we can declare the 20th century's macroeconomic theorists failures.
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