tag:blogger.com,1999:blog-2499715909956774229.post4525298414072092754..comments2024-03-22T22:37:02.639-07:00Comments on Stephen Williamson: New Monetarist Economics: All Mathy and No Place to GoStephen Williamsonhttp://www.blogger.com/profile/01434465858419028592noreply@blogger.comBlogger10125tag:blogger.com,1999:blog-2499715909956774229.post-48392513458163993052015-06-24T08:47:05.256-07:002015-06-24T08:47:05.256-07:00Romer's posts are getting increasingly disappo...Romer's posts are getting increasingly disappointing. He keeps making a very big deal out of something that to me seems trivial. We all know that most sellers have at least some marker power. Perfect competition is very rare. Does Romer object to every model that assumes a can opener, sorry, a perfectly competitive market? I don't think so, since even in his own model the final good is produced by a singe perfectly-competitive (apparently the contradiction did not bother him there) firm. <br /><br />As far as Boldrin and Levine are concerned, their paper makes an interesting point. That even when there are many firms and no administrative barriers to entry (e.g. patents) so that each firm is a price taker, if there are capacity constraints then the price will be above marginal cost and hence the innovator may be able to cover the fixed cost associated with a new invention, depending also on how fast the rate of imitation is. This issue is of particular importance to markets like pharmaceuticals, where empirical economists and economic historians who are not vested in a particular mode of formal theorizing have questioned whether, given the time it takes to reverse-engineer and start producing a new drug, patents are really necessary. Here is an example:<br />http://icc.oxfordjournals.org/content/20/3/721.abstract<br /><br />It is a pity that Romer stayed away from this question and in turn focused on...a can opener. Constantine Alexandrakishttps://www.blogger.com/profile/03148709241309623293noreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-44589946285707140372015-06-24T06:52:22.910-07:002015-06-24T06:52:22.910-07:00"It is silly to ignore the obvious difference..."It is silly to ignore the obvious difference between saltwater and freshwater economists. Both sides claim that the other side is engaged in pseudo-science. Krugman doesn't take you seriously and vice versa."<br /><br />Saltwater/freshwater is a term Bob Hall made up in the 1970s, and it does not apply today, among practicing macroeconomists. Krugman of course is no long practicing. He's now a journalist, and his ideas about the state of the macro profession come from - the 1970s.<br /><br />"The facts disagree with you: http://aalto-econ.fi/tervio/CitationClusters.pdf"<br /><br />That's their interpretation of the "facts." Stephen Williamsonhttps://www.blogger.com/profile/01434465858419028592noreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-34491397614975076222015-06-24T03:31:13.431-07:002015-06-24T03:31:13.431-07:00The facts disagree with you: http://aalto-econ.fi/...The facts disagree with you: http://aalto-econ.fi/tervio/CitationClusters.pdfAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-9007017256204113542015-06-23T17:20:26.604-07:002015-06-23T17:20:26.604-07:00It is silly to ignore the obvious difference betwe...It is silly to ignore the obvious difference between saltwater and freshwater economists. Both sides claim that the other side is engaged in pseudo-science. Krugman doesn't take you seriously and vice versa.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-6656888267813034402015-06-23T14:27:36.794-07:002015-06-23T14:27:36.794-07:00Cattaneo in 1861 distinguished the physics of weal...Cattaneo in 1861 distinguished the physics of wealth from the psychology of wealth. In modern jargon, the physics is like the inputs and the psychology is the TFP. The fount of TFP is entrepreneurship and Austrian economists have argued this is not capable of being modeled mathematically. The failure of the modern growth theory program to date indicates they are correct. <br />Smith showed in 1776 that we do know a bit about the nature and causes of wealth of nations. Modern growth theory has not added anything to that. Math helps not at all. Romer was smart enough to realize that and struck off in a different direction.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-70775578692474088842015-06-23T09:08:42.438-07:002015-06-23T09:08:42.438-07:00"Schools of thought" is a very old-fashi..."Schools of thought" is a very old-fashioned idea. In the 1950s, when people communicated by snail mail and did not travel as much, you would indeed be influenced primarily by the person in the next office, and a school of thought would emerge. It's silly to think of things in that way now.Stephen Williamsonhttps://www.blogger.com/profile/01434465858419028592noreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-66940610608202516612015-06-23T07:33:42.316-07:002015-06-23T07:33:42.316-07:00"Schools of thought" only exist in the m..."Schools of thought" only exist in the minds of people who want them to exist so they can have someone to blame when their crappy ideas aren't adopted immediately by everyone.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-69851030588272259812015-06-22T10:33:29.744-07:002015-06-22T10:33:29.744-07:00"...whereas Romer, as well as other folks you..."...whereas Romer, as well as other folks you disagree with, belong to others."<br /><br />Let me guess. You probably think that David and I are Chicago school and Romer is something else. David was a student at the University of Western Ontario. I went to UW-Madison, and a guy I talked to a lot as a student was Mark Gertler, a noted New Keynesian. Romer actually has two degrees (undergrad and PhD) from Chicago, and he also held an academic position there. So what are you talking about?Stephen Williamsonhttps://www.blogger.com/profile/01434465858419028592noreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-58388294795226105092015-06-22T10:26:29.745-07:002015-06-22T10:26:29.745-07:00In my experience every "school of thought&quo...In my experience every "school of thought" has one member. I've been around places which are supposed to be schools of thought, and found a lot of diversity in how people think. I think you're prejudiced.Stephen Williamsonhttps://www.blogger.com/profile/01434465858419028592noreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-15584780766326074042015-06-22T00:44:17.775-07:002015-06-22T00:44:17.775-07:00"I disagree with David on a daily basis, but ..."I disagree with David on a daily basis, but he's one of the more honest and un-clubby economists I have known in my professional career."<br /><br />Nope. You an Andolfatto belong to a particular school of thought in econ (that schools of thought exist is nothing special or extraordinary for a social science.) whereas Romer, as well as other folks you disagree with, belong to others. Gee, that's what most of these debates are actually about: fundamental differences between schools of thought concerning methodology and axioms.Anonymousnoreply@blogger.com