Tuesday, November 22, 2011

Dan Hammermesh

Did Hammermesh suffer a trauma at the hands of some macroeconomist? Did Ed Prescott make fun of him? What do you think explains this? The relevant passage is this one:
Interviwer: Here is one of the questions I wanted to ask you, with regards to Heilbroner’s book. With the economics profession, in the aftermath of the financial crisis, being somewhat in disrepute…

Hammermesh: Stop! Stop, stop, stop. The economics profession is not in disrepute. Macroeconomics is in disrepute. The micro stuff that people like myself and most of us do has contributed tremendously and continues to contribute. Our thoughts have had enormous influence. It just happens that macroeconomics, firstly, has been done terribly and, secondly, in terms of academic macroeconomics, these guys are absolutely useless, most of them. Ask your brother-in-law. I’m sure he thinks, as do 90% of us, that most of what the macro guys do in academia is just worthless rubbish. Worthless, useless, uninteresting rubbish, catering to a very few people in their own little cliques.

Interviewer: I’m not sure most people in the outside world would make a distinction between macro and microeconomists.

Hammermesh: I know. It’s up to us to educate them. I got this line from a friend in architecture the other day. He said exactly the same thing. I went through the same litany, trying to disabuse him of this notion. It’s like pushing a stone up a giant hill. It’s not going to get me very far, I agree. But nonetheless it is the case that most of us, and most of what we do, remains tremendously useful, tremendously relevant, and also fun!

Interviewer: The point I was going to make is that with the public perception of economics being on the negative side right now, and the limitations of economics being highlighted in the media, this book, The Worldly Philosophers, is just fantastic at showing what an amazing thing economics was, what amazing insights it brought to bear on the world. People just hadn’t thought about things in that way before.

Hammermesh: I agree, and a lot of the insights are still very much valid. Nonetheless, all the people in the book have been defunct for at least 60 years now. There have been some great economists since then, in the last 30 to 40 years. For example, George Akerlof, with his notion of asymmetric information and the failure of markets. It’s a truly brilliant idea and it’s ubiquitous in our lives. There’s Gary Becker, who in my view is the top economist of the last 50 years. His notions of family bargaining and how families behave are terribly important, and affect how, in the end, we all think. These guys who Heilbroner is talking about and the other ones of the last 50 years – none of whom is a macro person, by the way – have had equal influence. It goes on. It just is no longer stuff that is relevant to the macroeconomy. Unfortunately that’s a very important area and we have been derelict on it.

Interviewer: What’s the solution, do you think?

Hammermesh:* I do believe in markets. People are interested in being useful in this profession. It doesn’t mean the people who were the bad guys from the last 20 years in macro are going to be doing anything different. They’re incapable of doing anything different! But markets do work and the dead and useless get shoved aside by the young and useful. I’m a tremendous optimist. I do believe markets work and that people run to fill niches. There’s an obvious niche here, and you’re already starting to see it being filled. I’m sure the journals in academe are going to reflect this change too.
The interviewer actually has got the picture here, when she says: "I’m not sure most people in the outside world would make a distinction between macro and microeconomists." Indeed, that was what the post-1970 revolution in macroeconomics was all about. The early revolutionaries - Lucas, Sargent, Wallace, Prescott, for example - had and have a tremendous amount of respect for the advances made in microeconomics. They, their students, their students' students, etc., used those advances to move the science of macroeconomics forward. It seems extremely odd that Hammermesh does not embrace modern macro. Maybe he doesn't know what it is? I'm sure Ed Prescott's views of Becker's work, and of Akerlof's early contribution to information economics are not that different from Hammermesh's. Hammermesh should read my defense of contempoary economics.

There is actually nothing new about Hammermesh's views of modern macro, which predate the financial crisis. Just ask some of those excellent macroeconomists who no longer work at UT Austin. One of the amusing aspects of this is that Hammermesh is the author of "Professional Etiquette for the Mature Economist." How do you put these two sentences in the context of maturity and etiquette?
I’m sure he thinks, as do 90% of us, that most of what the macro guys do in academia is just worthless rubbish. Worthless, useless, uninteresting rubbish, catering to a very few people in their own little cliques.


*This appears to have been edited from a previously-posted version, where Hammermesh's answer to the question read:
I do believe in markets. We had some useless macro guys here who just left, thank God, and we’re now looking for replacements. I do think the failure of these people is conditioning how we search for a replacement. I’m quite sure the journals in academe are going to reflect this too. People are interested in being useful in this profession. It doesn’t mean the people who were the bad guys from the last 20 years in macro are going to be doing anything different. They’re incapable of doing anything different! But markets do work and the dead and useless get shoved aside by the young and useful. I’m a tremendous optimist. I do believe markets work and that people run to fill niches. There’s an obvious niche here, and you’re already starting to see it being filled.
Notice what got deleted.

23 comments:

  1. Wasn't there some falling out between Hamermesh and Russell Cooper? It would be interesting to know how UT Austin's econ dept's reputation has fared under his stewardship, in terms of cites in top journals and ranking of its faculty.

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  2. So who were some of the great macroeconomists who left UT Austin?

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  3. You people will have to figure that out on your own.

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  4. Dan's own work and person has also suffered in the hands of the general public, maybe this is part of the puzzle. If not, it is still hilarious:

    http://www.thedailyshow.com/watch/mon-november-14-2011/ugly-people

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  5. Dean Corbae and Cooper are the two most well-known macroeconomists who left, I think. There were also a number of junior people who left in recent years, I think a couple went to Toronto and one to the Philly Fed.

    They're now trying to rebuild, from what I heard (which may be wrong) they were working on getting Leeper and a junior coauthor to come.

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  6. Very good. Actually, in this case I think he deserves the ridicule. It's certainly useful to point out that appearance matters, and to quantify the effects, but he jumps from the research to the policy conclusion that ugly people need protection under the disabilities act. Try to implement that.

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  7. Is UT Austin full of James Galbraith clones? I know little of how they operate these days.

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  8. I think Prescott called him ugly once.

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  9. UT Austin has some solid theorists and applied labor/econometrics folk as a whole, and some stars from other fields.

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  10. Th original interview, which was since edited, was worse, steve. Here is a link with some excerpts.

    http://freakynomics.blogspot.com/2011/11/hamermesh-macro-is-rubbish-but-academic.html

    He refers to "two worthless macro guys who just left here, thank God!"

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  11. There seem to be several different versions of the interview floating around. See my note at the end of the post. Another version just says "some" useless macro guys, and the one you link to also included some comments about Prescott (who he despises) and Sargent (who he likes).

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  12. A rare post when I can agree with you.

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  13. Oh, here is the name of someone who left...and not a bad macroeconomist: Finn Kydland.

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  14. That was way back. I don't think Finn was disgruntled about anything going on in the department. The funny part of that was that Finn left Carnegie because he didn't like his Dean, but the Dean moved to Texas too.

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  15. So a glance at the jobmarketrumors board indicates that - if the posters are credible - UT Austin has slid alarmingly down the rankings under Hamermesh. He appears to have been a disaster for the dept. But again, the source may be rubbish.

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  16. Yeah, I was reading that thread too:

    http://www.econjobrumors.com/topic/daniel-hamermesh-at-ut-austin-is-ugly-here-is-why

    Again, EJMR is... special... but the most damning posts appear to be written in a professional way. If they're true, yikes.

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  17. Yes, the EJMR is interesting reading. It did not tell me anything I did not already know. I'm not going to air the dirty laundry here.

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  18. To see how destructive Hamermesh can be, just look at Burhan Kuruscu's CV and then ask yourself how Texas could fail to promote him.

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  19. Actually Steve Kydland did leave because he was disgruntled with the department. But that was back in the 90s and unrelated to the fight currently being referred to.

    Kyland says in his Nobel Prize autobiography, "In the mid 1990s, I was hired by the University of Texas, supposedly to help them build up the macro group. Unfortunately, while everyone in my family enjoyed Austin very much, in the end the administration's concept of keeping a promise was quite disappointing, and we unhappily left."

    http://www.nobelprize.org/nobel_prizes/economics/laureates/2004/kydland-autobio.html

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  20. This is so long ago that I forgot the details, and some of the participants (good friends of mine) are no longer with us.

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  21. What do you think about this?

    http://cheaptalk.org/2011/12/01/really-great-essay-by-raquel-fernandez-on-the-culture-of-economics/

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  22. "This is so long ago that I forgot the details, and some of the participants (good friends of mine) are no longer with us."

    Rest in peace, Scott and Bruce. I in particular really liked drinking Irish whiskey with Scott.

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