I certainly agree with this:
the professional economists who either play important roles in making policy or appear to have influence on the discussion got their Ph.Ds from MIT in the second half of the 1970s. An incomplete list, with dates of degree:
Ben Bernanke 1979
Olivier Blanchard 1977
Mario Draghi 1976
Paul Krugman 1977
Maurice Obstfeld 1979
Kenneth Rogoff 1980Larry Summers was at Harvard during the same period, but he was an MIT undergrad and very much part of that intellectual circle. Also, just about everyone on the list studied with Stan Fischer, who remains very much in the middle of policy-making.
Note that we are talking about macroeconomic policy. But some important microeconomic policy makers came out of that period as well. Carl Shapiro comes quickly to mind.
Of course, Krugman has other sentences that I could not have written.
Analytically, empirically, the MIT style has had an astonishing triumph.
As you know, I think that macroeconomic data can be twisted to “prove” any theory. You can look at reasonable, credible blog posts by Scott Sumner or Tyler Cowen pointing out many discrepancies between recent macroeconomic performance and the Krugman-style Keynesian analysis. Empirical macroeconomics seems to me to boil down to a pure exercise in confirmation bias.
As you also know, I have a less exalted view of MIT’s approach to economics and of Stan Fischer’s role as the Genghis Khan of macro. See, my recent post on academic hiring networks, my memoirs of a would-be macroeconomist, or my recent essay on camping-trip economics. Read that essay next to Krugman’s post.
Does it relate to fancy math? In my field fancy math is a driver. Who us going to argue with fancy math? But there are also other fads that rise up. But because they have to prove ay least somewhat useful they seem to fall away quickly. Right now we are into whole genome analyses. We don’t see many gene expression arrays anymore. Sequencing is losing some steam. Stem cells have finally settled into a reasonable niche, pardon the pun. There are still a lot of knockout mice and antibody work because they are genuinely useful. Gene printing seems to have stalled. Protein synthesis would probably be revolutionary but it is hard, probably especially the folding part. The point here is, I could go on and on, but my uninformed impression of economics is more of a winner take all research program with fancy math having an inherent advantage? There is no word for “heterodox” in biological sciences for example. I don’t think that is because economics isore tolerant. We know academia is winner take all in several other respects. For example, a famous advisor can have a lot of students that he or she can’t possibly actually advise, let alone teach. I would like to see word counts of how many words a Stan Fischer actually uses to advise his median student.
My guess is there is no real advice so much as they get effectively directed to spread across the steppes of economics and rape everything they find with math and burn anything that resists. In other fields people tend to specialize. Yes they will use their tools across different applications, but these have natural limits. Math seems to have no limit in impressing academics with novel applications.
I also find it odd that Krugman is contrasting the Chicago school against MIT. But then, he is he expert. But MIT just less constrained by ideology? Why make rational/efficient market assumptions until you have to if your real mission is equations?