tag:blogger.com,1999:blog-2499715909956774229.post4414389579272281005..comments2024-03-09T02:22:57.289-08:00Comments on Stephen Williamson: New Monetarist Economics: Brad DeLong: B.S. ArtistStephen Williamsonhttp://www.blogger.com/profile/01434465858419028592noreply@blogger.comBlogger69125tag:blogger.com,1999:blog-2499715909956774229.post-82433224916869493262012-02-06T12:59:23.807-08:002012-02-06T12:59:23.807-08:00I'm waiting for someone to make a joke about h...I'm waiting for someone to make a joke about how pigeons are smarter than Psychologists...Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-50632241321409527812012-02-02T15:42:51.021-08:002012-02-02T15:42:51.021-08:00People, understand that Williamson is upset about ...People, understand that Williamson is upset about social democratic economists like Quiggin or Thoman because he embarassed himself when he vainly tried to attack them:<br /><br />"Like the "efficient markets hypothesis," DSGE has no implications, and therefore can't be wrong."<br />http://newmonetarism.blogspot.com/2011/08/john-quiggin.htmlAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-46767200972703018732012-02-02T07:47:46.596-08:002012-02-02T07:47:46.596-08:00Why is it so damn hard for people to know the diff...Why is it so damn hard for people to know the difference between "lose" and "loose"? Of course, anon above has more issues than just that, but Christ.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-53083336046637821142012-02-02T05:59:55.185-08:002012-02-02T05:59:55.185-08:00"Cognitive dissonance"
Not sure you kno..."Cognitive dissonance"<br /><br />Not sure you know what that means.Stephen Williamsonhttps://www.blogger.com/profile/01434465858419028592noreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-75198712913752511332012-02-02T01:28:00.835-08:002012-02-02T01:28:00.835-08:00Read your paper. Two words immediately came to min...Read your paper. Two words immediately came to mind: Cognitive dissonance http://en.wikipedia.org/wiki/When_Prophecy_Fails<br /><br />It all makes sense to me now. Your tone gives you away. I now understand why reading your blog gave me so many problems for it reads only as rationalization. How you say it gives it away; it just takes time to see what is going on.<br /><br />Why the over reaction to any question or criticism in a comment? The denial? The refusal to support defrocking of opportunists like Greenspan?<br /><br />As Festinger and his colleagues predicted, the inevitable disconfirmation would be followed by an enthusiastic effort at proselytizing to seek social support and lessen the pain of disconfirmation.<br /><br />No surprises in your paper. It never mentions private debt (the bubble and Great Moderation are seen only from the "asset" side) or relative decline in research, education, or investment or the massive shift in income to the 1%<br /><br />By the end it became clear: you are a fervent believer after a failure or disconfirmation. <br /><br />Lucas said it couldn't happen and you believed. But it did, on your watch, and you never saw it coming. <br /><br />No wonder you and your fellows hate comments. Your blog is like a Free Republic forum board.<br /><br />You said it yourself, quoted below.<br /><br />No wonder any light of reality is so hated here. Those of us you are out in the laboratory (the "Real World") see that is is entirely behavioral. We see a profession totally captured by special interests. We are right and your are wrong, but you won't admit such because that would mean giving up what you have captured, your self identity.<br /><br />Self preservation has brought out worse in others.<br /><br />You wrote:<br /><br />For many economists, I think Akerlof and Shiller’s work crosses the boundary into weird economics, and behavioural economics may be seen as leading us down a slippery slope. At the bottom of that slippery slope, we conclude that everyone is stupid — individual consumers, firms, and policymakers — and we stupid economists should just close up shop and go home.<br /><br />We will soon know who is right or wrong: 2013, when we cannot roll our debt and we loose a trillion in federal spending.<br /><br />My bet is that the behaviorists will then have their proof.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-72043851809886527052012-02-01T18:06:14.615-08:002012-02-01T18:06:14.615-08:00"Their models, taken literally, sometimes sug..."Their models, taken literally, sometimes suggested that a crisis of this magnitude couldn’t happen."<br /><br />Baloney. Read this paper, and find the part that deals with this. I address that criticism in there.<br /><br />http://epress.anu.edu.au/apps/bookworm/view/Agenda,+Volume+18,+Number+3,+2011/7641/Text/williamson.htmlStephen Williamsonhttps://www.blogger.com/profile/01434465858419028592noreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-72876642429033649992012-02-01T09:29:08.744-08:002012-02-01T09:29:08.744-08:00I have also heard the claim that certain models ar...I have also heard the claim that certain models are incompatible with the existence of the crash, but I've never heard anyone actually give an example of such a model and explain how it doesn't permit them.Wonks Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-35823458446670845682012-02-01T08:06:02.715-08:002012-02-01T08:06:02.715-08:00Richard,
Please stop using quotes from textbooks,...Richard,<br /><br />Please stop using quotes from textbooks, papers, etc. First, why aren't quotes from Steve's textbook used? I am sure you could find a quote from his book that argues the models and methods of "modern" macro are quite useful for understanding the recent financial crisis. Why doesn't this quote count? Is this because he doesn't have Yale, Harvard, or MIT behind his name and such pedigree means a lot to you? Or because it doesn't agree with your prior opinion, and therefore can be ignored as a reasonable point of view? <br /><br />Second, using quotes only shows you are unwilling to think through these issues and make your own judgements/arguments. It appears you already have your mind made up, and then look for quotes to confirm your prior. That's fine, but it is not a great way to make convincing arguments, especially to an academic economist who is not impressed by pedigree. I am not saying Shiller is not an expert, he is; however, that doesn't mean because he says something it is universally true, or is somehow going to convince anyone that "scientific economics" is not useful.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-27556200217648892652012-01-31T19:57:13.404-08:002012-01-31T19:57:13.404-08:00"Over-literal" interpretation of models:..."Over-literal" interpretation of models: Acting as though the model is literally reality; reality will function exactly like the model, or a lot closer than is warranted. Prime example, Ricardian Equivilence, another example market efficiency.<br /><br />I don't have time to pull up a lot of cites, but here's Robert Shiller of Yale:<br /><br />"The financial crisis delivered a fatal blow to that overconfidence in scientific economics. It is not just that the profession didn’t forecast the crisis. Their models, taken literally, sometimes suggested that a crisis of this magnitude couldn’t happen."<br /><br />at: http://www.project-syndicate.org/commentary/shiller75/EnglishRichard H. Serlinhttps://www.blogger.com/profile/09824966626830758801noreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-18945709733562838102012-01-31T18:53:29.916-08:002012-01-31T18:53:29.916-08:00"...some of these guys throw that out the win..."...some of these guys throw that out the window."<br /><br />Who are these guys? Examples please. What is being thrown out the window exactly? What do you mean by literal interpretation?<br /><br />To tell you the truth, Richard, while I have learned a few things in this comments section, I can think of individual conferences where I learned much more in a day than in two years of reading this stuff.Stephen Williamsonhttps://www.blogger.com/profile/01434465858419028592noreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-64989977672411728952012-01-31T16:41:17.583-08:002012-01-31T16:41:17.583-08:00A Pigouvian tax would be great. It would do a lot,...A Pigouvian tax would be great. It would do a lot, but it wouldn't take care of the basic science related free rider problems, the market problems with non-rival zero marginal cost idea products. Quoting the great growth economist Paul Romer of Stanford:<br /><br />As just one example, recall that the increasing returns to scale that is implied by nonrivalry leads to the failure of Adam Smith’s famous invisible hand result. The institutions of complete property rights and perfect competition that work so well in a world consisting solely of rival goods no longer deliver the optimal allocation of resources in a world containing ideas.<br /><br />page 8, at: http://www.stanford.edu/~promer/Kaldor.pdfRichard H. Serlinhttps://www.blogger.com/profile/09824966626830758801noreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-45171017354656270662012-01-31T13:37:45.038-08:002012-01-31T13:37:45.038-08:00I said in my comment that there was debate in the ...I said in my comment that there was debate in the seminars and conferences. I've participated in it. But only 20-30 people get to hear it. The journal article has some discussion of the previous literature and criticisms, but it's not like the blogosphere where someone can respond to the journal article, and then there can be a response to the response, and so on.<br /><br />In the journal article they're usually conservative in their interpretations to reality with lots of caveats, true, but then in public some of these guys throw that out the window and start interpreting the model very literally, perhaps because that makes their libertarian philosophy sound better to others.Richard H. Serlinhttps://www.blogger.com/profile/09824966626830758801noreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-33570845476887362382012-01-31T13:29:27.255-08:002012-01-31T13:29:27.255-08:00I'm referring to the advanced science of actua...I'm referring to the advanced science of actually reversing/repairing aging with nanobots actually repairing you cell by cell to like new (18 year old, or better) condition, and other ideas like cloning your own stem cells. Amazing things, but today we're already cloning whole organs.<br /><br />For more on this frontier see:<br /><br />From Oxford scientist Aubrey de Grey, "Ending Aging: The Rejuvenation Breakthroughs That Could Reverse Human Aging in Our Lifetime"<br /><br />From MIT Innovation Prize winner Ray Kurzweil, "Transcend"Richard H. Serlinhttps://www.blogger.com/profile/09824966626830758801noreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-62544524007564199682012-01-31T08:36:24.388-08:002012-01-31T08:36:24.388-08:00"You wouldn't want to live vastly longer&..."You wouldn't want to live vastly longer"<br />"No"<br />Am I misinterpreting a double-negative? Or are you assuming mortality will change without improvements in morbidity?Wonks Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-70287480491730930842012-01-31T07:52:33.167-08:002012-01-31T07:52:33.167-08:00"...but it's a lot harder to check for go..."...but it's a lot harder to check for good interpretations from the models to reality."<br /><br />Wrong. That's one of criteria that we use to determine whether a paper should be published."<br /><br />"Plus, there's not a lot of debate in journals."<br /><br />Wrong again. There's debate there. And there is even more on the road to publication. Much of the debate occurs in seminars and conferences, and it's pretty heated, on the very questions you seem to be interested in. If you were actually attending those seminars and conferences, you wouldn't be saying that.Stephen Williamsonhttps://www.blogger.com/profile/01434465858419028592noreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-50620875157880150832012-01-31T07:47:42.964-08:002012-01-31T07:47:42.964-08:00"Uh, have you heard of global warming?"
..."Uh, have you heard of global warming?"<br /><br />So the answer is the standard one. Pigouvian tax.<br /><br />"It, by and large, can't be practically patented..."<br /><br />No, that's part of the problem. There is too much patent protection for drugs.<br /><br />"Are you happy with the cancer cure rate?"<br /><br />Especially not with all the resources used up in studying it. We should keep trying, but that's a lot of money spent without much bang for the buck. You have to ask whether the resources could be better-allocated.<br /><br />"You wouldn't want to live vastly longer..."<br /><br />No.Stephen Williamsonhttps://www.blogger.com/profile/01434465858419028592noreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-62509431108083715662012-01-31T07:42:47.594-08:002012-01-31T07:42:47.594-08:00Exactly. I think we all understand this will never...Exactly. I think we all understand this will never happen. Point taken.Stephen Williamsonhttps://www.blogger.com/profile/01434465858419028592noreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-8496618528004791252012-01-31T07:41:19.090-08:002012-01-31T07:41:19.090-08:00How about this?
http://www.riverdancelodge.com/Co...How about this?<br /><br />http://www.riverdancelodge.com/Corporate-Retreats.html<br /><br />Look under "team activities," for example:<br /><br />"Egg Drop - You'll need fresh eggs. Using the materials found in the wilderness, the team goal is to build a structure that will support a free falling egg dropped from a predetermined height without the egg breaking."Stephen Williamsonhttps://www.blogger.com/profile/01434465858419028592noreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-67072970291304227352012-01-31T06:15:42.481-08:002012-01-31T06:15:42.481-08:00Thank you Professor Thoma for pointing out how utt...Thank you Professor Thoma for pointing out how utterly pathetic this right-wing nut is.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-19566517755624861162012-01-30T21:15:36.333-08:002012-01-30T21:15:36.333-08:00Delong is an economic historian.
Maybe Williamson...Delong is an economic historian.<br /><br />Maybe Williamson could ask him about historical levels of federal r&d spending as a percent of GDP when we had "good times" Federal R & D is less than half of what it used to be as a percent of GDP.<br /><br />You might also ask DeLong about when business investment (and taxes) were higher, as a percent of GDP<br /><br />Lots for you to learn from DeLongJohn L. Davidson, Esq., Saint Louis, Missourihttps://www.blogger.com/profile/06489381481280010964noreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-40481703052752373202012-01-30T17:13:12.454-08:002012-01-30T17:13:12.454-08:00By the way, I didn't see the fireworks above b...By the way, I didn't see the fireworks above before commenting. Generally, it's important to not impede getting out important ideas, information, and other truths for "civility". But you do want to be as polite as possible without too much sacrificing clarity, and calling important truths as they actually are. Most people who I disagree with in the blogosphere are, I think, well intentioned, so there should be no personal animosity.<br /><br />I do think the blogs serve a good purpose for the following reasons at least:<br /><br />1) The journals aren't the be-all and end-all. They present mathematical models where everything is thoroughly checked for math errors, but it's a lot harder to check for good interpretations from the models to reality. Plus, there's not a lot of debate in journals. A few allow an author or two to write a counter point or response, or even a response to the response. But in their old school, hard form, you can't have an open ended back and forth, free flowing debate that goes a lot longer than one or two rounds. You have this to a large extent in seminars, or informal discussions, but how many people get to benefit and learn from those, 20, 2, it can't reach the wide global audience like blog debates can.<br /><br />2) Do you want to only inform professional economists in your narrow specialty, or do you want to teach and convince all economists, well-educated non-economists, opinion leaders, and policy makers. If you want to do vastly more good you'll want to teach and convince them too, and they aren't going to read your highly specialized and mathematical journal articles.Richard H. Serlinhttps://www.blogger.com/profile/09824966626830758801noreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-86224993804477070322012-01-30T17:12:37.353-08:002012-01-30T17:12:37.353-08:00"Alternative energy I'm not so sure about..."Alternative energy I'm not so sure about. Why do we need the government to promote that? Where's the market failure?"<br /><br />Uh, have you heard of global warming? Millions of air pollution related deaths estimated each year, trillions of oil dollars going to states that sponsor terrorism and some of the worst authoritarian regimes in the world, where without this oil money, they would be forced to reform and become productive to eat. Minor externalities, I know.<br /><br />I mean, first you are very comfortable assuming that there's zero difference in the utility a person receives from his home, car, clothes, income, if they're in the 5th percentile or the 95th. Then you can't see the externalities in alternative energy? I'm really starting to question whether you live on the same planet as me. And yet you're comfortable assuming Ricardian equivalence. Typical families constantly watch the government to estimate its future spending so they can adjust their personal consumption, but they get no more utility (or disutility) from their car and house if they're the worst among their peers or the best. That's an interesting world you live in. <br /><br />"But medical research? You think we don't do enough of that?"<br /><br />It, by and large, can't be practically patented, so enormous externalities. It's a non-rival good (as well as non-positional), zero marginal cost idea product, so a private business will have a very hard time selling it, and fully extracting its utility. First, you can't price discriminate well. So what ever price you set a lot of people who could have gotten a lot of utility for this zero marginal cost product won't get it. And for those who do, the transactions costs are vastly higher than the government just putting it on the internet free and easy 24/7/365. A private company will want to keep it secret as it can't be patented. And all future generations benefit, but how is a private company going to make a deal to sell the idea products to those unborn people? <br /><br />Plus, "You don't think we do enough of that?" Are you happy with the cancer cure rate? Do you like having to diet – a lot – to not become Jabba the Hut? You don't know people who have serious arthritis, mental illness, diabetes, multiple sclerosis,...? You wouldn't want to live vastly longer, perhaps reverse aging someday, maybe in our lifetime, or our children's?Richard H. Serlinhttps://www.blogger.com/profile/09824966626830758801noreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-92187624324356299582012-01-30T16:29:16.723-08:002012-01-30T16:29:16.723-08:00When you come up with some evidence that Delong be...When you come up with some evidence that Delong behaves better in response to correction, let us know.Wonks Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-8543465325375531232012-01-30T15:57:08.750-08:002012-01-30T15:57:08.750-08:00How about a retreat with bonding exercises?How about a retreat with bonding exercises?Stephen Williamsonhttps://www.blogger.com/profile/01434465858419028592noreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-79956537731722262622012-01-30T15:55:40.333-08:002012-01-30T15:55:40.333-08:00I'm glad someone wants to discuss this.
"...I'm glad someone wants to discuss this.<br /><br />"Why aren't you and Cochrane blogging for big increases in infrastructure, alternative energy, basic scientific and medical research,…? That's something Democrats would agree to."<br /><br />1. I do not speak for John Cochrane.<br />2. What kind of infrastructure do we need? It seems to me that our airports need work. Alternative energy I'm not so sure about. Why do we need the government to promote that? Where's the market failure? Scientific research? Maybe. But medical research? You think we don't do enough of that? I think it's well-funded. Education should be a priority - e.g. early childhood education in inner cities.<br />3. Those are things that Democrats like me would agree to.Stephen Williamsonhttps://www.blogger.com/profile/01434465858419028592noreply@blogger.com