Category Archives: Economic education and methods

From the comments on statistical malpractice

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1.

Frankly there are just too many PhDs. The talent pool is too diluted.

Imagine if the NBA had 1,000 teams instead of 30. Those extra 10,000+ players will be playing basketball by its official rules but it will mostly be of very poor quality compared to what we see from LeBron James. There’s nothing you can do about that if you’ve committed to having 1,000 teams. There simply aren’t 15,000 basketball players who are as talented as an average NBAer.

2.

Basically, every clever idea that requires human beings to do their duty without reliable detection and penalty for violation, has already been thought of, implemented, and failed entirely. Not just failed entirely, which is bad enough, but made it around two orders of magnitude more burdensome to get papers done. Not good papers, just any paper, which are still mostly bad papers. “Huge additional costs, zero apparent benefit” is the worst of all possible worlds, and such a bad world, that one just needs to move to a totally different planet.

So, the only solution is a completely different mechanism and institution of accountability.

I agree with both of these points.

Looking at the American Economics Association

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Two from EconJournalWatch. First, Mitchell Langbert writes,

This paper shows that the AEA is nearly devoid of Republicans, though many Republicans are found among its membership, which remains open to all who pay the membership dues. I find that the political skew increases up the AEA hierarchy. I use voter registration and political contribution data to examine what I call ‘players’—AEA officers, editors, authors, and acknowledgees (that is, those thanked in published acknowledgments). For AEA players, the Democratic:Republican ratio is 13:1 in voter registrations and 81:1 in political contributors.

Second, Jeremy Horpedahl and Arnold Kling quantify the increased focus on issues of gender, race, and inequality in the AEA’s flagship publications.

The 21st century has provided the economics profession with many new topics to consider. These include: outsourcing; supply chain complexity; the issues that the financial crisis of 2008 raised with respect to bank regulation, housing finance, and ‘shadow banking;’ the structure, conduct, and performance of Internet businesses and the policy issues that have arisen; the role of China in the world economy; the rise of artificial intelligence; the opportunities and challenges posed by ‘big data;’ the rise of intangible capital and the increased importance of intellectual property; and changes in U.S. economic geography, with some major cities generating an increased share of income.

With all of these new topics, as well as continued interest in perennial topics in monetary policy, fiscal policy, public finance, economic history, econometric methods, productivity and growth, economic development, and so on, for any topic to have gained market share, as gender, race, and inequality have, is striking.

Jeremy did the research and the overwhelming share of the writing of the paper, and it was generous of him to include me as an author. The above two paragraphs are just about my only contribution to the text. But (a) the idea for the paper was inspired by one of my blog posts and (b) I was involved enough to share the blame for any errors or problems that remain in the paper.

[UPDATE: 3. How to teach differently to minorities is the latest announcement about an AEA workshop. Speaking of the road to sociology. . .]

Widespread statistical malpractice

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Alvaro de Menard writes,

It is difficult to convey just how low the standards are. The marginal researcher is a hack and the marginal paper should not exist. There’s a general lack of seriousness hanging over everything—if an undergrad cites a retracted paper in an essay, whatever; but if this is your life’s work, surely you ought to treat the matter with some care and respect.

You have to read the whole long post to see how he got to that point. Pointer from Tyler Cowen.

Road to sociology watch

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American Economic Association President Janet Yellen writes,

This annual award will recognize departments and organizations that demonstrate outstanding achievement in diversity and inclusion practices. Focus will be on those applicants that take productive steps to establish new programs and procedures to create an inclusive environment, and to increase the participation of underrepresented racial/ethnic minorities, women, and LGBTQ+ individuals. The award is open to all U.S. based departments of economics and other organizations employing significant numbers of economists, and there will be up to four winners per year.

…Please also encourage your colleagues to adopt the AEA’s “Best Practices for Economists Building a More Diverse, Inclusive, and Productive Profession” and to link to these practices from your departmental websites.

Five books on macroeconomics

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In response to a list of five conventional macroeconomics textbooks, I compiled my own list of books to read on macroeconomics. They won’t necessarily cover what’s on the exam in a typical course, but they will help you become learned on the topic.

An excerpt from my short essay:

The late Charles Kindleberger was an economic historian, and I believe a historian’s perspective is crucial for looking at macroeconomics. After all, there are no repeatable experiments in macroeconomics, only historical episodes. Kindleberger looks at the most dramatic episodes in history, using the framework of financial instability developed by Hyman Minsky. Kindleberger is a better expositor than Minsky. Also, Kindleberger emphasizes the phenomenon of “displacement,” in which a sudden change in world conditions, brought about by a major new discovery or the outcome of a war, triggers a dangerous mania. My own thinking about macroeconomics is a combination of Kindleberger-Minsky and Fischer Black (below).

Cultural evolution and economics

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Nathan Nunn writes,

There are two primary benefits that culture provides over rationality. First, culture-based decision-making provides a quick and easy way to make decisions. To the extent that rational decision-making (narrowly defined) requires costs due to information acquisition or cognitive processing, then acting on one’s transmitted cultural traditions and values saves on these costs. The second benefit is that relying on culture allows for cumulative learning.

More separate excerpts below.
Continue reading →

The Harald Uhlig matter

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John Cochrane writes eloquently.

neither Krugman, nor most of the twitter mob, nor the AEA have the beginning of a leg to stand on for a charge that Harald’s tone is way out of line. Yet Harald’s are the first tweets to receive public reprimand from the sitting president of the American Economic Association.

The whole post is a must-read, in my opinion. Cochrane goes on to cite an AEA code of conduct, which reads in part

Economists have a professional obligation to conduct civil and respectful discourse in all forums.

As Cochrane points out, Paul Krugman is a persistent violator of this. I would add that Joseph Stiglitz is, also.

These are bad times in the intellectual world. In the near term, I see nothing that will stop things from getting worse.