Has blogging brought a new golden age of heterodox macro?

Here is a long feature article from The Economist, excerpt:

The clearest example of the power of blogging as a way of getting fringe ideas noticed is “The Money Illusion”, a blog by Scott Sumner of Bentley University, in Waltham, Massachusetts. In the wake of the financial crisis Mr Sumner, a proponent of market monetarism, felt he had something to say, but no great hope of being heard.

Do read the whole thing, it is interesting throughout and also an important article.  I would answer yes to the question posed by the title of this post, we are in a golden age of macro once again, yet it is played more or less by the technical rules of the 1920s and 30s, because a lot of blog readers are turned off by heavy math.  And couldn’t a lot of those old macro ideas have been turned into shorter blog posts anyway?  It’s like getting to rerun earlier macro debates but with terser, more articulate, and better trained macroeconomists.  Isn’t that fun?

I know that Scott would insist he is not heterodox macro at all, but I can report I found it striking to be cited in this article as a more or less establishment source, rather than heterodox myself.  In both cases the journalist is probably correct.

Comments

Sumner being able to get more attention for his ideas is not a good thing at all.

What about Austrians?

Even worse.

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Most of the time, I read the first comment and think "great comment".

Sorry, Silas, but (assuming you're not being sarcastic) I don't like your cantankerous-ness today.

The most toxic ideas die quickly under scrutiny. Sumner's have done anything but...

What xactly are Sumner's ideas other than NGDP targeting? (not being snarky)

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It is a toxic idea that "historically, X has correlated with good economic times; therefore, causing X will cause good economic times, and I will ignore all the ways it can be gamed".

Sumner says exactly that, with X = inflation and X = 5% NGDP growth.

I agree. Targeting variables is inherently useless.
But he isn't heterodox.

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Is your fear inflation?

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Sumner is as far from heterodox as is possible. He is an extremely orthodox monetarist.

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"The blogosphere can only help the economics profession in the long run," he says confidently as one or two Marginal Revolution readers jump from their Ivory Tower saving the next generation of students the head-ache of their droll and lack of dexterity.

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What kind of Golden Age has a field coming to a broad consensus on ideas with neither descriptive nor predictive power? Diversity isn't a benefit if the majority of participants are wildly and passionately wrong.

Diversity isn’t a benefit if the majority of participants are wildly and passionately wrong.

How does diversity not produce many and varying wrong results? And how does that prevent this from being a Golden Age? The many and varying choices in economic ideology openly co-mingling is exactly what I would call a Golden Age.

If none of the idea are testable then diversity doesn't help one bit. To advance science ideas have to be proven either right or wrong. Which is of course why Economics is not always considered a science.

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I wish I had words to express how much I agree with you.

As a sidenote: Most definitions of science specifically demand broad consensus among practitioners.

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Given that service economies need a different approach from manufacturing economies, it seems like something is still really missing from all of this.

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For the cost of an electron and your time, you too can show the power of blogging.

With low costs of entry and no screening mechanisms other than a comments section, you get what you pay for and invest in.

Present comment included.

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Drop "heterodox" and maybe even "macro" then I would agree with the post's title. The benefit I see from blogs (and other social media like twitter, FB, google+) is their ability to overcome physical and professional barriers and open up the conversation. As an economist, I can sample from many different vantage points in bite-size pieces when I have time. Plus with non economists hanging around, the blogging economists are pushed to argue in plain English and simple charts. The fancy math and models will follow but maybe the base will be more solid. Sure there's a lot of disagreement now...that is probably always healthy for economics...but at least people are in conversation.

Re: "The fancy math and models will follow "....or not.

How often do you see a blog posting later presented as a paper with the fancy math open to critical review by their peers.

Do blog posting count on your vitae?

Probably every day if you know where to look.

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Bill, I see blogs / social media as an early input to the research / policy process. It is a quasi replacement for the lunch table conversation. (I don't eat lunch with Scott Sumner but sometimes I discuss his post over lunch with my colleagues.) There are many stories a path breaking theories which were scribbled on napkins or came from some off hand conversation. Blogs can also speed up the process of getting feedback on research ideas.

I think its value is identifying weaknesses in your argument so that you don't make it.

Can you point to any academic articles that originated with a blog. Academics are so competitive that I am surprised they would disclose an idea, and its support, before first publishing it. How can you proove that you were the first to discover something, or had a unique way of massaging data, if you put it out there at a very early stage when someone else can run with it.

Do you cite your blog to prove you were the first, or made that unique statement which someone else included it in their article without citing your blog?

Sorting out the "bad" arguments before investing tons of research time is actually a good thing...time is scarce. Unlike some other disciplines, research in economics tends to be discussed widely before it shows up in peer reviewed journals (the gold stars on academic resumes or CVs). Working papers are very common. These tend to be long and blogs are a great way to get a short summary out for discussion. I suppose there's a danger that blogs will make it easy to scoop someone else's research, but the Internet did not invent this type of bad behavior. A desire to maintain one's professional reputation will likely remain the best defense.

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Bill, they even pre-publish in Economics it seems years before publishing. I think that's insane too, but it probably doesn't work the same as in my field. But the point is they do it.

Also, papers aren't as good and peer review isn't as good as you think it is. It may not be as bad as I think it is, but that's not the point.

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Working papers are quite common, and you can point to them, and cite them.

Have you ever seen an academic paper cite to a blog?

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Bill, funny you ask about blog citations...I have a forthcoming paper with coathors in the AEJ: Economic Policy and we cite Richard Thaler and Cass Sunstein's Nudges blog. Sure it's rare now, but I don't see many citations of lunch conversations at the NBER Summer Institute either. I may get more out of the discussions at the SI for my research but it is invitation only...blogs are more open (for better or worse).

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As a less serious question, who is beating up on Krugman in the article's cartoon?

http://krugmandebate.com/

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I don't understand the heterodox distinction.
There appears to be two strands,
1) Mainly Critiquing "Mainstream" economics, which should just be a part of ECONOMICS, at least if we want to be able to call ourselves "scientists" without laughing.
2) A few normative economics which just tells un-falsifiable stories about social interactions or how the author thinks the world should be.

Why is there a distinction?
1) Some monolithic mainstream culture refuses to listen to the Galileo's among us. Calling them heterodox as opposed to heretic.
2) They for some reason want the title economist instead of author of fiction.

Of course there could also be a belief that all economics in your area of interest is un-falsifiable, but then what would be the point and why would you want to call yourself an economist as opposed to a philosopher?

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Unfortunately--or, really, I guess, fortunately, doing the boring and difficult math is still essential...after all, being glib and persuasive and wrong is not really what we want and need in terms of macro (and, no, I am not saying I think Sumner is glib and persuasive and wrong...I'd just like to see the whole approach spelled out in more detail) (which it is, actually, but not on his blog).

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Guess they got your number, Tyler, boring poop mainstreamer for sure, hah hah hah! :-)

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The idea that 2011 is the time for self-congratulation in macroeconomics is some combination of laughable and offensive, I'm not sure about the exact proportions. The support I see for this claim is that a lot of macroeconomists have started writing down their thoughts on current events in three paragraph snippets and then link to each other. One heroic example is a macroeconomist who writes a new three paragraph essay each day about why there should be more inflation.

Matt, I don't think of a golden age as a period of "self-congratulations" but one of advancement. The process is by no means over and right now it may seem particularly messy with so many view points being defended. Nominal GDP targeting provides an example of an argument that moved from the periphery to the center of economic debates. Also the "three paragraphs" in blogs do not replace more lengthy scholarship...the blogs are just a form of communication.

No, he's partially right in that this community is monetizing this practice of circle-jerk linking.

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The support for the claim is that lots of people actually read blogs, unlike obscure economic journals that only get read by professors.

JC, I see how it could be a good way to popularize the ideas, and it is probably a good thing for more people to have access to these debates and for economic literacy to increase in the public.

Maybe I took the "golden age" language the wrong way and Tyler was using it synonymously with "prominence" or popularity--I assumed a golden age would mean that the state of economic science was advancing, gaining more predictive power, a stronger epistemological footing, or experiencing an increasing ability to identify/craft policies that have salutory and predictable effects. I don't see any of that happening and can't see how short, conversational comments can serve that function.

Claudia, the reason why it is inappropriately self-congratulatory is that the field still seems to be in a state of disarray after 2008, even though economists now link to each others websites. Maybe you are right though that the process is generating new ideas with the potential to restore the coherence that seemed to hold among macroeconomic views during the 'great moderation' period.

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The Economist on Austrianism: While it provides insights into booms and their ending, it fails to explain why things must end quite so badly, or how to escape when they do. Low interest rates no doubt helped to inflate America’s housing bubble. But this malinvestment cannot explain why 21.8m Americans remain unemployed or underemployed five years after the housing boom peaked.

Eck? Surely malinvestment is a problem that only heals itself at it's own pace, and that pace can only be slowed by misguided stimulus efforts. Now that explanation might not be right, but it is an explanation.

How do we know that pace? And how will we know how our actions affect it for better or worse? And we're always acting in some way. There is no baseline to draw comparison to. Your explanation is useless.

He means, attempts to prevent the correction only draw out the correction.

Stimulus is not strictly an attempt to prevent a correction. Saving failing banks or coercing them to keep people in their homes after default are attempts to prevent corrections. But lowering the interest rate by the Fed or government-funded UI have nothing to do with the correction. They're attempts by the government to smooth AD so as to minimize the collateral damage the correction might cause.

“Must we accept parenthood for every economic development in the country? That is a hard thing for us to do. We would have a large family of children. Every time one of them misbehaved, we might have to spank them all.” - NY Fed Governor Strong

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We need more heavy mathematics, not less!

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Worstall uses the opportunity to have a pop at The Economist.
http://timworstall.com/2011/12/29/natalie-solent-proved-right-about-blogging-yet-again/#comments

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Adrian Ratnapala has it right above. The Economist bangs the drum every week for more "stimulus" spending by the ce@Washington (ce = criminal entity) even though all government spending is directed by state bureaucrats meeting government spending goals, not by entrepreneurs meeting market demand. Anyone who wonders why there are 21.8 million Americans unempoyed despite billions spend by the ce should read Veronique de Rugy's article "Roads to Nowhere," Reason (Dec. 2011), pp. 21-22. Then they should read Murray N. Rothbard, Power and Market: Government and the Economy, especially the section in which he applies the socialist calculation problem to all government spending.

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Sure I'm missing something .... but to me it seems crazy to expect that printing money will help the economy as long as people are going to go and spend most of it in China.

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I'm sure most here hate Krugman, but if there's one thing I think he's definitely right about, it's that blogs have demonstrated very conclusively that expertise translates poorly between fields and even experts in a field can say some very stupid things and hold stubborningly wrong opinions within their field of expertise for a very long time when not given the benefit of five years of subsidized research and the aid of assistants and peer review.

Way back in the day, I was a philosophy major as an undergrad and my classes were not so different from the current economics blogosphere. Students came to class with their opinions, naturally gravitated toward the arguments and literature that supported what they already believed, and as they became more educated and eloquent, they were armed with better and better arguments and believed even more fervently what they already believed before the class started. Almost nobody ever changed an opinion, with the most obvious reason being: it's philosophy. Almost none of the claims made can be proven true, so instead of even trying to crawl toward some semblance of truth, we became very good at poking holes in arguments while simultaneously making our own arguments either very difficult to poke holes in or making them so obtuse and dense that almost nobody could understand them, and even if they did and succeeded in poking holes, we could convince ourselves that they really just didn't understand us.

And the sad reality is that economics in the blogosphere resembles this process very closely and doesn't resemble science at all.

Adam, I am more hopeful about the capacity of people to learn from blogs. My RSS reader is an eclectic mix of economics blogs (and other fun stuff). I spend more time reading the blog posts of economists with views and analytical styles different than mine (in an attempt to learn and test my assumptions about the world). A silver lining of the recession/financial crisis is that economists of (almost) all persuasions admit that we have a lot to learn. (We now know that the Great Moderation was NOT a golden age for economics.) I don't expect any "expert" to rise up from the blogosphere and tell me the answer. There are many careful research studies to be done. (I am a big fan of empirically testing micro foundations of macro theories.). Sure, we may never find immutable "laws" of the macroeconomy, but there's nothing wrong with being a dynamic social science.

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Agree with other posters about math. Tyler, Alek: how about a one-math-intensive-post-per-week trial for a month or so and see what happens? Or is the real problem that it is not easy to mark-up and post equations in HTML?

It's getting easier: http://www.mathjax.org/

Uses close to native Latex markup.

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Tyler said,

"I know that Scott would insist he is not heterodox macro at all,"

I was an orthodox economist in 2007, completely heterodox by early 2009, and am now becoming slightly more orthodox. Interestingly, my views haven't changed at all during that 4 year span.

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You sound like somebody out of the Rocky Horror Picture Show, Scott, :-).

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