Economists don’t know what they are talking about

I am sorry, I would not have written that post title a few months ago, as it is not in general my style.  But I am disheartened by the recent Booth poll of economists, where the weight of opinion suggests that the Fed should raise rates this December.  Only seventeen percent say “uncertain,” when in my view that is obviously the correct answer.  I won’t myself say “don’t raise rates,” but there are enough good arguments for that view (see Krugman for instance) that it deserves more than 19% support.  In the space for comments, there was not a lot of talk about how outlining the broader path for monetary policy was a better and more important question.

This same group, in September, gave a lot of support to the idea of a $15 national minimum wage, a policy change which Alan Krueger himself rejects.  How many of those supportive economists were primed to first think of typical manufacturing wages in Mississippi?

You people on that panel, you are all better economists than I am.  Except when you are allowed to vote.

But quite seriously, my opinion of the professional consensus — on topics outside an individual’s research specialty — really has gone down as a result of these polls.  And, not to put too fine a gloss on it, but my opinion of myself has gone up.  Why should I not just come out and say it?


"And, not to put to fine a gloss on it, but my opinion of myself has gone up. Why should I not just come out and say it?"

Didn't think that was possible, but thanx for letting us know.

Has anyone graphed Tyler's opinion of himself over time? If no, why not? What is the upper bound, and on what time horizon? Does such a graph deserve to be raised in status?

That sounds tricky. Maybe we could graph Tyler's influence on policy debates over time. We could put Jan on the same graph, although this creates scaling issues.

For all you know, Jan is actually Barrack Obama, responding to economics blogs on work time in his cushy gov't job.

Brian, are you saying that I'm not an econ blogger with an international following?

I did not read that poll like that at all. A lot of them had no opinion, and the majority of the commentary supporting their position was given by those who were uncertain instead of those who agreed.
But, I do agree with him that in academia there is an obsession with specialization which leads to a very basic level of knowledge on topics outside of ones fields. If you don't read the news on the regular and don't follow anything outside your field, the correct answer is No Opinion. Recognize you don't know, and move on (which is what a lot of them did)

Every single person they polled is on the faculty of a private research university with a certain amount of cachet, bar a couple of people from UC Berkeley. What do their teaching schedules look like?

"my opinion of myself has gone up. Why should I not just come out and say it?”

Because when you say it, other people's opinion of you goes down.

Luke 14:8-11

8 “When you are invited by anyone to a wedding feast, do not sit down in the best place, lest one more honorable than you be invited by him; 9 and he who invited you and him come and say to you, ‘Give place to this man,’ and then you begin with shame to take the lowest place. 10 But when you are invited, go and sit down in the lowest place, so that when he who invited you comes he may say to you, ‘Friend, go up higher.’ Then you will have glory in the presence of those who sit at the table with you. 11 For whoever exalts himself will be humbled, and he who humbles himself will be exalted.”

Very Jewish philosophy. By contrast, the Greeks believed in bragging--if you could back it up.

TC is indeed a Greek philosophy genius. He won the New Jersey state chess championship in the mid 1970s, when no less than GM Pal Benko had played and won the year before. Sadly, TC says he's lost all his old games. For an exciting match see the round seven game in the London tournament, Aronian, Levon2788–Topalov, Veselin2803.

This may speak more to the politicization of economics than to actual economic opinions themselves. One wonders if the votes were anonymous if results would change.

Was economics ever not political?

I think it started as a focus on ones own welfare, then went through a sciency phase where it pretended otherwise, until that .. failed.

We are where we are because econ did not coalesce as a science with 90% support for these propositions.

Ecin was revealed to be stuck at arguments supporting competing world views.

What I love about econ is that, at it's core, it's not political but a science, cause and correlation. It's only when political agendas are introduced that the science gets diluted.

Economics is a science ????!! ;)

That sounds more like a counterfactual, at least compared to public (or prominent) economists.

I am not even sure what it would look like. There would be no poll because there would be accepted models of
cause and correlation instead?

HPP there will come a time in your life when you recognise the pre-eminence of politics in economic discussion. It's part of growing up.

Only when Krugman and deLong are yapping, not when decent people are yapping.

Right ... when people I agree with are speaking they are moved purely by the spirit of scientific inquiry. When people who disagree with me are speaking, it is clearly a partisan rant.

"Was economics ever not political?"
There was reason for PPE being a logical area of university concentration.

Political economics was less political than economics, especially since Reagan and if the mythical Reagan was for it, then it must be absolute truth economics, and that is not political in any way.

What I note is how economists have had one arm chopped off because two armed economists always said things like one the one hand hiking the minimum wage will pressure employer profits and drive efforts to cut worker costs back to limit price hikes, but on the other hand, the minimum wage hike will mean those workers spend nearly all the wage increases buying more stuff creating demand that will increase production that will require hiring more workers, even if prices are higher.

And higher prices for things like food will not result in the people Trump likes going on diets and hunger strikes or stopping their jet flights, so higher minimum wages is a market redistribution of wealth from the top quartile to the bottom quartile where it will be spent paying workers instead of spent inflating stock prices or prices of cars that were driven in old movies, but that the buyers would refuse to look at if rolling off an assembly line today.

Fed policy has only inflated asset prices of stocks and that has forced CEOs to look for ways to boost profits which means cutting labor costs which means killing jobs or cutting wages and benefits. And made buying old stuff at insanely high prices that would never be bought if produced today and sold on Amazon at labor cost plus shipping.

Politically, two handed economists are too dismal. Thus politically, politically correct economists have only one hand to wave.

Hasn't economics always had a bit of a bipolar aspect in the allocative versus distributive aspects of the field? Both I do think attempt to follow something of a scientific approach but can only do so by assuming away (generally in a certerus paribus clause) the political aspects of social interactions. The allocative side will do this much better. The distributive side largely cannot and really shouldn't -- that's why it's called political economy.

Seems like the (irrational?) fear of inflation is still widespread among economists.

To reverse, and support the economists, perhaps the size of "hike" is not sufficient to inspire them.

You can throw a quarter percent in the street and not miss it?

Still, not very sciency.

Given that most of the established economists went to school during the 70s/80s when inflation was roaring out of control it's understandable that they are still worried about the inflation monster rearing its ugly head again.

Similarly, the economists who studied during the Great Depression/WW2 and were leading the commanding heights of the intellectual economics establishment during the Post War years were primarily concerned about demand shortfalls.

"[M]y opinion of myself has gone up.Why should I not just come out and say it?"

Oh, I know this one! Because a very large proportion of the time when you hear phrases like this one, they are spoken by idiots who believe *everything* that happens proves how smart they are.

Is it such a common thing to say? I liked Tyler saying it, he's just saying what we all think from time to time, and having some fun by sharing it.

I also liked Tyler saying it. I have felt that way at times in my life. For instance maybe I thought someone at another company was much better at doing something than my company was or was much more advanced in their methods. Then I found out how they actually did something and thought "wow I am way better than I thought I was."

Academics who do research on a very specialized topic don't know much about things outside their areas of expertise. This holds true across fields, especially when the question is political and the priors for which answer is correct are strong.


This is a point I have made myself. Academic economics is very specialized. Economists are typically very ignorant of areas outside their field. That their words are given any importance is just a manifestation of the "halo effect".

And sometimes, even within their field, they know remarkably little of real world relevance. There are many young trade economists who spend their lives playing with these Melitz/Eaton-Kortum type heterogeneous model algebra and have a very poor understanding of actual trade flows and country characteristics. In essence, they know very little about international trade. The same applies to young macroeconomists who spend their lives playing with these increasing complex computational models and statitstical techniques (e.g. particle filters) and have a very poor understanding of real economies.

+100 indeed!!

Hugely letting yourself off the hook.

First, there is a poll. This shows the starting expectation of disagreement and competing views.

Secondly, "not my area" is not deferring to consensus, it is opting out of an argument.

The entire framework is to deflect attention from the lack of an answer, it covers for "nobody knows."

Maybe the better questions to ask everyone is why rates have not been raised as the marco statistics improved.
1) Fed locked into it's stated targets -- 2% not achieved so cannot raise?
2) Clear empirical evidence that shows increasing the rates would tank the economy putting us back in a crisis level output? That is also to say there is clear evidence that the monetary policies are working and the Fed is not merely pushing on a string.
3) (as suggested above) Fed doesn't really know what's going on and the policy is the frozen deer in the headlights behavior? In other words they don't really have any strong evidence that policies (or the economy) are working per theory as the policies are not achieving the stated policy objectives as they should be and they don't know how to assess the harm being done (if any) staying with the interest rate policy or how to assess what would happen if they raise.

In essence, they know very little about international trade.

Yeah, I was moderately surprised when my international trade class had very, very little that wasn't theory/math

Well, economics is not economic geography or economic history.

So what is their utility?

Are we looking at the same polls? Only 5% have a strong opinion on the rates question, in either direction. And only 2% agreed in any way that raising the minimum wage would increase economic output!

Clearly paying more money to people surviving only by welfare and handouts and dumpster diving will not increase gdp because they will only pay for what they are consuming instead of government buying it with free borrowed money printed by the Fed or by rich people cashing in some Fed inflated assets and paying for stuff given to the poor.

Besides, if a hike in the minimum wage boosts the price of eating out by $10, Donald Trump will go on a hunger strike, and then sneak out at night dumpster diving because he's going make sure the farm workers and food prep workers lose their jobs. No way will the Donald pay $510 instead of $500 for salad, steak, and wine. That extra $10 will make that vintage wine taste sour.

Funny thing is, that administrative body (as it has become) will probably do "something;"

Just to show that it can.

Saying "I don't know" is not a career ennhancer.

Often the right answer that cannot be spoken.

Certainly not if you want to get on TV.

Another rendition of the phrase is something like: "I'm not so smart, but I must be surrounded by total idiots."

So, what's going on under the hood there? An artificially low self-image is common among scientists,
and fits well with the 'NY Times test' of realizing that 'general knowledge' in your area is poor but overlooking the
fact that general knowledge in other areas must also be assumed poor. The comparison is basically a realization
of the immensity of total human ignorance - and while previously one thought oneself to be operating in a rare
area of ignorance (as a scholar), now one realizes that all the scholars are operating in vast seas of ignorance,
each making relatively little headway. As a result, pooled scholarship should come with the assumption not of
approximating the truth by assembling many informed perspectives, but instead embracing bias and distortion and
ignorance, because the general knowledge they all draw upon together is a mess of misinformation and the
specialized knowledge they each possess uniquely is nearly insignificant in the face of the unknown.

Perhaps, but arguments about literature and about how many pounds of fuel are needed to lift a rocket are fundamentally different. On one you show your math and settle the question.

Econ is proving not to be rocket science.

Economists can model the economy just as well as climatologists can model the climate. Do you support one and not the other because you don't like markets very much?

Gochujang, that's engineering, not science.

Straussian Take -

Economists must take extreme points not to advocate for those specific actions but to "move the goalposts" of what would be considered potential actions.

I sometimes think that my father knew more about economics than many economists, and he was just a businessman who had probably read neither Smith nor Hayek. He did seem to know a bit about Keynes' notions though; we had good fun spotting some of the weaknesses. It was a good lesson in life - even a very clever bugger like Keynes can be wrong in his own specialist area.

If I have one criticism of academics generally, it's that they spend most of their adult life in a world very different from ordinary people.

This can be particularly limiting in economics, where the field of study is largely about the interactions of ordinary people. Most economists have no well of experience to draw on.

I think this is true of politics as well. George McGovern went into business after politics, and he found it to be a real eye-opener.

McGovern and his partners opened a hotel and conference center which went belly-up. McGovern was an honest man, so he admitted quite explicitly that some of his experiences made a reassessment of some of the positions he'd taken over the years in order, but the biggest problems were caused by state law, state courts, and the lawyers who write and administer the laws. The eye-opener was the extent to which they were exposed to tort liability. He said that years after they'd shuttered the enterprise, there were still pending lawsuits from people who had fallen down on the property.

At the very least, those silly IGM polls should provide results that are weighted by respondents' expertise on the specific question. To me the most disappointing aspect of those polls over the years has been that people with specialties far from the question choose any option other than "uncertain" or "did not respond".

One quibble with Tyler, though: the IGM sample is tiny, and the inclusion criteria are a mystery. Other evidence suggests it's not very representative of the profession.

I guess that there are two of us going by "Economist" now. It was so simple that no one else was using it.

You guys should continue. If we get a bunch more posting under the handle I think it would reduce the number of "there is old lefty/righty going at it again" posts.

Yeah that is really horrifying that apparently the majority of economists are lacking a fairly basic grasp of sensible monetary policy. I think the $15 minimum wage is good policy, so I'm less with you on using that to continue the pattern though.

"I think the $15 minimum wage is good policy, so I’m less with you on using that to continue the pattern though"

It will likely cause a spike in minority unemployment. It will also likely result in a lot more low end automation. Kiosks in fast food places for ordering, more factory prepared and delivered food to restaurants with less on-site preparation.

Are those aspects you like, or do you think they are negatives but with costs worth paying?

From your website:

"About: I started this blog to post some journal entries I’d made during an acid trip. "

OK, now your comment makes sense.

Good policy locally in a few urban environments or nationally such that rural Idaho has the same minimum as suburban D.C.?

The first question in the survey was not about "good/bad policy." It was whether employment of low skilled workers would be substantially decreased. 66% did not believe that a $15 minimum wage would produce such. Amazing. So much for the demand curves they teach in 101 classes.

A better question: "what is the lowest level for the minimum wage that would produce substantial unemployment of low skilled workers?"

I think that's a case where you need to define substantial.

The issue isn't the economic ramifications of minimum wage regulations. It's this, The early twentieth century Supreme Court consistently invalidated compulsory minimum wage laws. The laws were considered unconstitutional for interfering with the ability of employers to freely negotiate appropriate wage contracts with employees. They were right, it's not the government's business to determine the financial parameters of legal, voluntary contracts. Minimum wage laws are fascist, an attempt by the state to control prices, in this case labor.

They don't have to answer to the commentariat!!

Ask a mundane, loaded question-- and responses are predictable. and unimportant.

Fundamental question to economists must rather be: Should the U.S. Federal Reserve exist at all?

Fundamental question to economists must rather be:

No it shouldn't. Goldbuggery is quackery.

congratulations, you wisely favor socialist central planning of interest rates and monetary policy. you fit right in with most economists. when did you first recognize the superiority of collectivist economics ?

Yeah, we need a system whereby, if someone stumbles on a big hunk of metal in the ground, prices double.

"What’s wrong with that?"

It might be someone else.

I just love false dichotomies.

Because that's incredibly relevant to people whose wealth is affected by the stock market. Let's also do a poll on whether the US government should switch to a parliamentary system.

Regardless of your feelings about the Fed, it's worthwhile to poll economist because that gives you an idea of what the Fed is thinking.

"[M]y opinion of myself has gone up. Why should I not just come out and say it?"

Because then they won't give you a shot at being one of the voters next time!

Interesting related side note: Seems like female panelists on average are more aware that their knowledge outside of their area of expertise is limited.

Heather Sarsons and Guo Xu find in this paper that "When asked about their level of agreement on survey questions about the economy, women [on the IGM panel] are less likely to give “extreme” answers in which they strongly agree or disagree. Women are also less confident in the accuracy of their answer. We provide evidence that the confidence gap is driven by women being less confident when asked questions outside their field of expertise."

Men are more arrogant than women? *shock*

Or men are more self-confident than women, or less given to risk-averse and self-protective hedghing. Pick your frame.

The known result is that women are less overconfident in their predictions than men. They are overconfident, but not by as much.

However, that is only one of many possible forms of arrogance.

Tyler, I couldn't agree more. I felt the same way after that group was polled on their opinion of the ACA. Even after the Oregon Medicaid experiments, a sizable majority still maintained that the ACA would generate significant gains in health and benefits that outweigh the costs. Shouldn't skepticism have been warranted? If anything these polls reveal the economists are more prone to ideological biases than they care to admit.

The FMOC setting interest rates to nearly zero for a decade has created a #deflationary environment for asset prices plus we are in the midst of uncharted levels of aggregate debt. As mentioned above, most academic economist are very skilled in one subject matter yet have little understanding on the political and social dynamics forge economic policy.
The hole has already been dug. The question becomes whether you want to be in the hole 100 meters or so deep of a point of no return. Raising rates is the only prudent policy to make at this time.
Generally, most economic policy is formed during an economic crisis which leads to shortsightedness, thus makes it more difficult to make a good decision further down the line. It's seldom, good economic / fiscal policy is brought forth during a period of “prosperity”.

Are you an economist? If so, I applaud you for going beyond merely agreeing with Tyler and actually posting a demonstration of what Tyler is talking about.

How is low rates deflationary for assets?

Am I supposed to read a word in a special way when you hashtag it?

Tyler is clearly an economics denier.

+1, and seriously does he see the parallel here?

You don't know what the phrase "scientific consensus" means.

There is a consensus that the earth is warming and humans are responsible for some portion of that warming, nothing more. There is no consensus that we should spend 10 trillion dollars on favored solutions of the Democrat party, like you, Gochojang, Barkley Rosser, et al. would have us believe.

Yeah, I was pretty modest and humble too. Then I met other people.

When I was an undergrad, I majored in economics, and I decided to take grad-level Micro I my senior year. I was speaking to the professor at the end of the course. He was a new hire, smart guy, nice fellow, a freshly minted micro theorist.

I mentioned that I was doing my senior thesis on monetary policy and he goes, "oh right, the Fed is doing that, what is it called?...fiscal...relaxation, thing?" Keep in mind that QE had been all over the finance/economic news for some time now by this point.

The lesson from that encounter was, sometimes the silo-ing is severe!

I'm mildly curious about what sort of institution you were studying at. At the college I know best, nearly 40% of the manpower is devoted to sections the four introductory courses. I think teaching stats is specialized, but pretty much 80% of the faculty have their portfolio of principles, micro, and macro sections. Only the accounting lecturer and the old guys with the endowed chairs do not have these sections.

It was an Ivy League university, but not one of the top ones. Snooty Harvard students have shattered my self-esteem well into adulthood.

For this professor it would have been his very first teaching assignment, barring whatever he may have done as a grad student.

"This same group, in September, gave a lot of support to the idea of a $15 national minimum wage, a policy change which Alan Krueger himself rejects."

Regarding that poll, it would have been a lot better if they has asked the Economists to provide an estimate on how much unemployment would go up as a result of increasing the minimum wage versus using the phrase substantial.

Be clear about what Krueger actually said. He opposed a $15 minimum wage because the US has never tried such a large increase so he had no econometric evidence to judge what the impact would be.

He was in favor of a smaller minimum wage hike which he thought would have a minimal impact on employment.

As an aside, I think Philip Tetlock would say the poll question is no good. When you say "an increase" but do not quantify it, you leave everyone polled to think of different size in the question.

We would know much more if we had a table of support (0, 0.25, 0.5 .. 2.0).

Tyler, have you changed your opinion about polls of other disciplines on politicized questions? e.g. Does this poll revise your opinion about the overwelming support among climatologists for the existence of human caused climate change?

What? Climate shows just the coalesced opinion we expect in a science.

How many astronomers do you need to ask about the position of Mars 432 days from now?


Right, because climate 'science' is exactly like Mars' orbit and nothing like, say, macroeconomics.

Actually, I can explain the scale of difficulty.

1. Orbital mechanics is a physical system with just a few working parts (or many that can be discarded as insignificant). Early work could be done with pen and paper, but computers definitely helped.

2. Climate is another physical system, with many more moving parts. You need big computers and big models. It is very hard, but it is still deterministic.

3. Economics is a living system. It is not deterministic. Every component in a market has not just rational choice, but emotional choice as well.

Which one is not like the others?

Short version: complex systems are a lot more resistant to the methods of science.

Also, how do you know a living system isn't deterministic? If it's not, if predictable inputs don't lead to predictable outputs, what do we make of the whole idea of studying people?

Also, people's actions influence climate in a way they don't (as far as I know) currently influence Mars' orbit.

Surely there is a great divide between the dead and the living? and then the (relatively) big brained?

Strange then that traditional economics has been so unfriendly to psychology, trying to average it out if the system.

They have tried to reduce crowd psychology to orbital mechanics.

On human interaction with climate, yes I would say it is impossible to model future political change. The science can only answer for a proposed atmosphere.

"Surely there is a great divide between the dead and the living? and then the (relatively) big brained?"

Surely? Surely? This is not how science works.

Complex systems: that's how to cleave these items in assessing the power of the scientific method. Mars' orbit is the odd man out here.

Here is a good bit on the difference between simple and complex systems:

Chaos on the billiard table

I say "surely" because it is possible to predict a balls motion to some degree of accuracy (decreasing with each interaction).

On the other hand, any system where a pool ball can just say "not today" is fundamentally not predictable.

I boggle that this point is not easily grasped. Pool balls do not have fads. They do not start heading south because everyone else does. They don't fear a bubble and head north before everyone else does.

They are hit, and to our ability to detect, they satisfy simple motion rules. Every time. It is only a very small uncertainty in each interaction that accumulates to gross uncertainty in the system.

This is fundamentally different than a system that starts with large uncertainty and tries to eliminate them with math.

I can't tell if you're being obtuse or not.

If humans are fundamentally unpredictable, the whole point of studying and predicting how people behave is pointless.

Is this what you are saying?

I grant that humans are a lot more complex than many other things we study. This is why our success at modeling human behavior has been so limited. That's it. Not some magic qualitative difference you keep trying to smuggle in.

Same applies to climate science. Not to Mars' orbit.

We have a problem, don't we?

There are certain things we must do, even if we know that we can't do them accurately. This is true in central bank deliberations. If we have money, we must have a money supply. If we have a money supply, we must manage it. If short term interest rates are the tunable control, we must use them.

Tyler says "Only seventeen percent say 'uncertain,' when in my view that is obviously the correct answer."

Of course. So the answer is do your math, do your competing studies, be humble, and make small adjustments, ready to reverse if they don't seem to work.

Don't pretend you know.

(The analog in climate would be to make changes, to see if you can retard warning, if that is your concern. Of course, in climate we have the argument without any gross change in the tunable variables. We just watch it happen.)

But yes, I think there is a fundamental difference in kind between systems that contain volition and those which do not.

I'm pretty sure your concept of 'volition' is unscientific.

Remember how Aristotle imputed volition to a moving projectile?

It is simple. I have two pets on my desk. One is a pet rock. One is a pet cat. I will not interact with either.

Is there a fundamental difference in predicting where each will be 10 minutes hence?

The cat is way more complex than the rock is, so such a prediction is way more difficult.

Suppose instead of a single rock, there is a precarious stock of rocks near an open window with an intermittent breeze blowing.

And the cat is sleeping.

I may be more confident in predicting where the cat will be in 10 minutes, and it's not because the stack of rocks contains some magical volition.

Leo Strauss? Oops, that was me.

Still a difference in kind. The rocks have a few stable states which can be modeled with statistical accuracy. The cat might go out the flap, good luck.

Is it true that the climate has a few stable states that can be modeled with statistical accuracy? From what I have seen the track record of predicting the rate of climate change has been a lot closer to the track rate of predicting GDP than to predicting where Mars will be.

In all honesty there is no track record for predicting the climate 50 years from now. As of now we have a few predictions and zero results for that far out.

@Gochujang: "Economics is a living system. It is not deterministic. Every component in a market has not just rational choice, but emotional choice as well."

Is it that, or is it that economics as taught, debated, and practiced--and macroeconomics, in particular--is inductive rather than deductive? That is, rather than observing human behavior, identifying consistent patterns, and building the theoretical framework up from there which evolve as new patterns are recognized, economists develop competing simplified, abstract models that replace real world variables with deterministic constants and then argue ferociously with each other over which is the true unified field theory, explanatory of all economic phenomena.

eccdogg, how about 37 years? "By 1978 Exxon’s senior scientists were telling top management that climate change was real, caused by man, and would raise global temperatures by 2-3C this century, which was pretty much spot-on."

FOOBAR007, you say "replace real world variables with deterministic constants and then argue ferociously." There is probably some chicken and egg there, but I think it is clear that the reduction to deterministic looking equations enabled a philosophy, yes.

It isn't at all clear that climate is deterministic. In fact it was in studies of weather and climate that a non-quantum form of non-deterministic behavior was discovered. It is called "chaos theory".

Kurt, I am trying to incorporate Lorenz. The pool table link I gave essentially explains his work. Thus I use deterministic in a broader post-Lorenz sense rather than Newtonian.

Three classes? Fully predictable, patterns of behavior that can be found, and then fully random?

Orbital mechanics is 1, climate is 2, human behavior is 3

Macro is about fooling oneself that 3 is 2

Ah, 3 questions that nearly illustrate 1, 2 and 3:

1) what is the position of the moon 100 years from now,?

2) what is the temperature in Los Angeles 100 years from now,?

3) what is the GDP of Los Angeles 100 years from now?

" You need big computers and big models."

One of the ten commandments of scientism.

Until you tie billions in funding to it. Then you'll get a lot more interesting answers.

Are petroleum geologists forming the consensus? Or are climate scientists?

My point is that economists aren't minimum wage scientists.

Tyler, any time you find yourself in agreement with Krugman on monetary policy is a time to check your assumptions, not congratulate yourself.

That would not demonstrate tribal politics in economics at all ..

"Tyler, any time you find yourself in agreement with Krugman on monetary policy is a time to check your assumptions, not congratulate yourself."

Krugman makes some thoughtful points when he sticks to pure economics. He just gets obviously biased when he starts discussing partisan matters. Sometimes the issues intersect, but when they don't his articles are worth reading.

The poll about the Fed asked two questions: should the Fed raise rates now, and should the Fed have raised rates earlier? Respondents supported the Fed on both questions. Before the financial crisis, conventional wisdom was the Fed was doing a good job. During the crisis, the consensus was the Fed was doing a good job. Query whether Fed policy is tailored to reflect conventional wisdom, the other way around, or both, but economists have been on the same page as the Fed for a long time.

Note that responses to *both* questions in the poll endorse the Fed's current and past actions. They say not only that the Fed should raise rates in line with what it has been strongly communicating recently, but also that rates should not have been raised earlier.

In other words, they're just deferring to the Fed's and the specialists there. The Fed has very high status in the minds of most economists. Isn't it fair that non-specialists would simply defer to the specialist institution that they generally have a very high level of respect for?

(That said, it would be good to see such deference and agnosticism stated explicitly, rather than endorsing the Fed's past time path of rates and pending decision with such gusto)

Let's defer to this guy:

I'm sure an economics PhD demonstrates something -- from what I understand, it's a long and arduous process -- but an understanding of economics is not it.

I don't find this particularly surprising.

Yep, this is a who's who of absolutely top people... but actually not many macro people. Caroline Hoxby is respected in econ of education, Dave Cutler and Amy Finkelstein are top healthcare economists - not surprising that they're not fully plugged into macro. I also would have expected agreement to be correlated with age (1970's experience vs. not), but there seems to be no age pattern.

I think the only thing these polls show is how little the surveyed actually care about the answer and just give the most politically correct answer that keeps them from getting into arguments at academic parties. Also whenever these surveys are published, the exact phrasing of the question should be the first line of the article.

I don't see any problem with the survey results: there's a difference between disagreement and uncertainty.

If a bias is revealed in the poll, it is a bias for normal; normal is our comfort zone. Cowen's willingness to accept the abnormal is to his credit as a possible policy maker. I'll repeat that, in his book, Tim Geithner describes himself as a crisis manager, not a trained economist, and as such was open to abnormal responses to a very abnormal economy. Sometimes 2 plus 2 does not equal 4.

The bias goes against normal for an economist. Normal is that when you make something more expensive, people by less of it.

Do economists know what money is? Do they know that there can be too much private debt? Do they recognize that maintenance takes energy, so the more you've built means more must be spent for that part of society, and it is taxing to do so? Do they know that bidding up asset values with easy credit is not real growth? A single profession cannot adequately explain the world.

Do economists know markets are manipulated in real time?

Since neither economists' nor the public ' s consensus views and voting patterns are imbued with the sort of self regulating accountability and scaling of inputs that markets are, these consensus views will naturally tend to reflect the biases of the moment. For instance, if the consensus persistently views monetary policy as too loose, monetary policy is almost certainly going to reflect this bias, and will be too tight. Given this, the only coherent position for an economist to take is that policy should always be the opposite of the consensus opinion of economists and voters.

One would think that something like an inflation target could defeat this problem, but clearly there is still enough discretion for the Fed to raise rates to the cheers of most observers while market inflation expectations are falling near 1%. This is why level targeting and forward market targeting, as in Scott Sumner ' s plan would be so effective. Much like a mechanical portfolio rebalancing system, much of the benefit would be simply to move us to mechanically do the opposite of what we would prefer to do.

Look at this tiny unrepresentative sample of "economists." And consider, how does one get to Yale, Harvard, MIT..... By being very specialized and expert in a tiny subset of economics. No place for the renaissance man or woman in this group.

I suddenly have even more respect for Kenneth Judd. He was confidently uncertain about both questions and his text response to the two questions were:

"The Fed spends many 10^7 dollars annually on econ research. In mid-2008, the Fed did not think that a crisis was at hand. With my budget..."


"I cannot be more knowledgeable than the Fed."

To me, the poll on minimum wage is far more damning, that's the one that should have tipped you off, Tyler.

There used to be a time, in Friedman's life for example, when economists were the one group that could dispel intuitive ignorance about the economy, in almost one voice, to the entire political public, as experts should. That time is gone.

Maybe it is mood affiliation.

Yellen is a female academic economist from Cal Berkeley who was prominent in the Democrat Party. So good economists support her policy actions.

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This is Tyler's most Sumnerian post ever

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