Trouble with Macroeconomics, Update


Paul Romer has the post Trouble with Macroeconomics, Update.

So ask yourself about the relative cost of:

  1. A paper that ridicules post-real macroeconomics and hurt’s some feelings
  2. A persistent equilibrium in which many economists are afraid to publish things that they believe to be true

In the paper, I refer to Voltaire as the true spirit of the enlightenment. Voltaire understood that the cost of 1 is not so large and that the cost of 2 is extraordinarily high.

After reading this post and much of the underlying article to which it refers, I can respond in the spirit of the post and the article.

Paul Romer’s article is great. I can’t understand a word that is in it, but I am sure it agrees with everything I have been saying for years. 🙂

After reviewing the quote that I used in this post, I decided to go back and look at the reference to Voltaire. I actually found some words that I could understand. Emphasis in the excerpt below has been added by me.

9.1 The Norms of Science

Some of the economists who agree about the state of macro in private conversations will not say so in public. This is consistent with the explanation based on different prices. Yet some of them also discourage me from disagreeing openly, which calls for some other explanation.

They may feel that they will pay a price too if they have to witness the unpleasant reaction that criticism of a revered leader provokes. There is no question that the emotions are intense. After I criticized a paper by Lucas, I had a chance encounter with someone who was so angry that at first he could not speak. Eventually, he told me, “You are killing Bob.”

But my sense is that the problem goes even deeper [than] that avoidance. Several economists I know seem to have assimilated a norm that the post-real macroeconomists actively promote – that it is an extremely serious violation of some honor code for anyone to criticize openly a revered authority figure – and that neither facts that are false, nor predictions that are wrong, nor models that make no sense matter enough to worry about.

A norm that places an authority above criticism helps people cooperate as members of a belief field that pursues political, moral, or religious objectives. As Jonathan Haidt (2012) observes, this type of norm had survival value because it helped members of one group mount a coordinated defense when they were attacked by another group. It is supported by two innate moral senses, one that encourages us to defer to authority, another which compels self-sacrifice to defend the purity of the sacred.

Science, and all the other research fields spawned by the enlightenment, survive by “turning the dial to zero” on these innate moral senses. Members cultivate the conviction that nothing is sacred and that authority should always be challenged. In this sense, Voltaire is more important to the intellectual foundation of the research fields of the enlightenment than Descartes or Newton.

I think I was right in the conjecture that he was trying to say things with which I agree.

After years of writing and supporting software to model the behavior of integrated circuits, I came to the conclusion that you needed to cross-check the simulated results by comparing them to more simplified models and your intuition about how the circuit ought to behave. If there were a discrepancy, then you had darn well better find a way to understand the cause of the discrepancy. Your intuition could be wrong, your simplified model could be wrong, the detailed model could be wrong, and/or the software could be wrong. You should not invest millions of dollars producing a real chip until you understood which of the above possibilities were actually occurring.

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