Friday, May 09, 2014

Thoughts on "Paradigm Shifts"

An e-mail exchange. Marco F. wrote Ciao Robert, Tutto bene? I'm very keen to read your view! A presto. Marco [skip] http://delong.typepad.com/sdj/2014/05/over-at-the-wceg-in-what-sense-does-economics-need-a-new-paradigm-thursday-focus-may-1-2014.html I replied Robert Waldmann 3:13 AM (0 minutes ago) to Marco Dear Marco

I commented over there at Brad's blog (in the thread). All I said was that I think macroeconomics works OK provided one sticks to 1972 vintage macroeconomics. Or in other words, Krugman usually seems to know what is going to happen next, so what's the problem.

I'd say the rest of economics is doing much better than macro. A huge amount of current research is solidly empirical based on experiments or natural experiments. Research doesn't need a general theory to progress. We can learn what sort of policies work without theory. I am thinking of, say, does preschool cause better life outcomes, does means tested cash assistance to the poor create dependency which lasts generations, and can people without medical degrees who harass (da noia a) other people about their weight, blood pressure, diabetes and blood cholesteral save lives ?

I think the answers are yes, no, and yes. For the first google scholar (fake) Nobel prize winner James Heckman, for 2 see http://angrybearblog.com/2013/12/food-stamps-obesity-and-dependency.html for the last one I forget where.

These are the sort of questions we need to answer and these are the sort of questions we can answer without a "paradigm."

I think a problem economists have is that they always think of physics when thinking of successful fields of inquiry. Physics has core theories of incredible simplicity and power. I doubt economics will have something like that. But useful and fascinating and wonderful things have been discovered which aren't simple universal laws.

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