tag:blogger.com,1999:blog-3621026.post4530641752984443486..comments2024-03-28T10:25:22.825+01:00Comments on Robert's Stochastic thoughts: Paul Romer has 3 QuestionsRoberthttp://www.blogger.com/profile/14455788499385673507noreply@blogger.comBlogger14125tag:blogger.com,1999:blog-3621026.post-49551692293940762272018-05-15T11:49:51.331+02:002018-05-15T11:49:51.331+02:00Solow deliberately confused a production function ...Solow deliberately confused a production function with an accounting identity, the "good fit to the data" in his 1957 paper is the result of a sleight of hand. Anwar Shaikh has demonstrated this with his "humbug production function" in 1974. <br /><br />This review of the corresponding Felipe/McCombie book sums it all up:<br />http://www.paecon.net/PAEReview/issue73/GuerrienGun73.pdf<br /><br />So Solows contribution to scientific progress is highly questionable...Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3621026.post-77641603917156211962017-08-25T07:36:36.364+02:002017-08-25T07:36:36.364+02:00I really love this post Robert, so thank you.
Bu...I really love this post Robert, so thank you. <br /><br />But I returned to it many years after its initial posting writing some stuff on Denis Noble's new book "Dance to the Tune of Life" which suggests that Lamarkianism is alive and well and growing stronger in the 21st century!Nicholas Gruenhttps://www.blogger.com/profile/08979019731787830666noreply@blogger.comtag:blogger.com,1999:blog-3621026.post-55378050410871865922015-09-13T22:44:21.524+02:002015-09-13T22:44:21.524+02:00Regarding the incorrect cancer theory that won a N...Regarding the incorrect cancer theory that won a Nobel, are you referring to Warburg or Fibiger? Warburg didn't win a Nobel for his theory, and although the particular parasite that Fibiger thought caused cancer was innocuous, many other parasites do cause cancer.Noah Smithhttps://www.blogger.com/profile/09093917601641588575noreply@blogger.comtag:blogger.com,1999:blog-3621026.post-84380343780447594062015-09-10T19:59:01.112+02:002015-09-10T19:59:01.112+02:00Dear Nick
I certainly agree that Robert Lucas is ...Dear Nick<br /><br />I certainly agree that Robert Lucas is the intellectual father of new Keynesian economics. However, I do not consider the shift from old Keynesian economics to new Keynesian economics to be scientific progress. Consider a new Keynesian model from 2008 (say Smets-Wouters). It proved useless in understanding the events of 2008 after having performed less well than univariate time series models in fitting data from 1992 through 2006.<br /><br />I think the only scientific merit of new Keynesian economics is that it doesn't have some of the false implications of new Classical economics. However, I also consider it a scientific dead end and utterly failed research program. I've written this dozens of times.<br /><br />The fact that Keynesian economics of the late 70s (and mid 2010s) is hugely influenced by Lucas illustrates the gigantic influence Lucas has had on macroeconomics. It does not demonstrate that Lucas contributed to scientific progress. For that to be the case, one would have to argue that macroeconomics has progressed. When I read papers from the 60s and early 70s or for that matter this book published in 1938, they seem brilliant and far superior to the stuff that's published now. Now this is partly because the old papers I read are selected -- they have become very famous and also were written by Riksbank Nobel memorial prize laureates (Solow, Tobin and Samuelson). <br /><br />Dear Thornton the kind of moron who used physics to understand human behavior might exist but wasn't mentioned in the post. You and I may suspect that many economists are motivated by physics envy and are pretending to be physicists, but they never admit it.<br /><br />On the other hand, I think many economists think all scientific progress is like progress in physics. It isn't just that they don't know of (or believe that there has been) progress in psychology and sociology -- they don't know about biology either (it is highly empirical & does not involve much math). They aren't literally retarded or morons -- just arrogant and ignorant as most people are (I sure am especially the arrogant part).Roberthttps://www.blogger.com/profile/14455788499385673507noreply@blogger.comtag:blogger.com,1999:blog-3621026.post-22701263429231620542015-09-09T12:59:56.929+02:002015-09-09T12:59:56.929+02:00So much fucking bullshit! What kind of moron used ...So much fucking bullshit! What kind of moron used physics to understand human behavior? What kind of moron thinks that all scientific progress is the same as progress in physics?<br /><br />If you are trying to understand people and you are using physics then you are, literally, retarded, as in cognitively defective. Thornton Hallhttps://www.blogger.com/profile/11402495641975262697noreply@blogger.comtag:blogger.com,1999:blog-3621026.post-3214786345262867622015-09-09T10:31:54.430+02:002015-09-09T10:31:54.430+02:00Very good post. But
- "But empirically, the S...Very good post. But<br />- "But empirically, the Solow radical simplification fits the available data surprisingly well". Yes, because there is an accounting identity behind (eg H. Phelps Brown, H. Simon, F.Fisher, J. Felipe, among others). Not very "scientific".<br />- Dixit-Stiglitz is a partial equilibrium result. "True" general equilibrium with imperfect competition has been abandoned in the seventieth : impossible to prove existence of at least an equilibrium (eg Giacomo Bonnano, http://www.econ.ucdavis.edu/faculty/bonanno/PDF/JES_1990.pd )Bernard Guerrienhttps://www.blogger.com/profile/02613842192811622919noreply@blogger.comtag:blogger.com,1999:blog-3621026.post-28261296175060969242015-09-08T23:59:00.058+02:002015-09-08T23:59:00.058+02:00Confusing Friedman with Feynmann is something I do...Confusing Friedman with Feynmann is something I do all the time. Especially when Rutgers football is once again proving the former was better about things he stopped discussing than things he continued pontificating about.Ken Houghtonhttps://www.blogger.com/profile/01440837287933536370noreply@blogger.comtag:blogger.com,1999:blog-3621026.post-45493520645418935652015-09-08T18:46:00.942+02:002015-09-08T18:46:00.942+02:00I see an alarming pattern in this comment thread. ...I see an alarming pattern in this comment thread. I wrote "Lucas didn't do that Friedman did that" now anonymous writes "Einstein didn't do that Friedmann did that". I expect the next comment to be that Romer didn't write that Friedmannn wrote that.Roberthttps://www.blogger.com/profile/14455788499385673507noreply@blogger.comtag:blogger.com,1999:blog-3621026.post-48168781687148448132015-09-08T16:50:29.448+02:002015-09-08T16:50:29.448+02:00A minor comment: Einstein introduced the cosmologi...A minor comment: Einstein introduced the cosmological constant to allow for his theory to have solutions corresponding to a static universe. Otherwise according to his original theory, (he believed) that the universe would contract from steady state. Friedmann later showed that his original theory allowed for both possibilities (expansion or contraction) based on the energy density in the universe (he made the assumption that the universe was homogenous and isotropic). Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3621026.post-8718636285276426102015-09-08T15:06:05.534+02:002015-09-08T15:06:05.534+02:00Robert: take a New Keynesian model from the late 1...Robert: take a New Keynesian model from the late 1970's. How would we answer the question "Does monetary policy have real effects in this model?"<br /><br />We would say:<br /><br />The level of M has no real effects.<br /><br />The variance of M has real effects (for the worse).<br /><br />The covariance of M wrt other shocks has real effects, that can be for the better or for the worse.<br /><br />Or, more strictly, we would talk about the effects of the parameters in the monetary policy rule, like M(t) = Mbar + bS(t) + e(t)<br /><br />We compare two possible worlds, with different monetary policy rules. (The question about the transition from one rule to another was always tricky, and Lucas himself was always very reasonable about how long it would take people to learn the new rule. He was not a nut who thought that we would immediately jump to the new RE equilibrium.)<br />Nick Rowehttps://www.blogger.com/profile/04982579343160429422noreply@blogger.comtag:blogger.com,1999:blog-3621026.post-64610162389197405602015-09-08T14:23:17.344+02:002015-09-08T14:23:17.344+02:00Even an unserious historian of thought can. Samue...Even an unserious historian of thought can. Samuelson and Solow (1960) noted the difference between the short term and the long term. That, even more than Phillips's, was the paper which really launched the Phillips curve literature which Lucas critiqued. Friedman advocated discussing rules rather than actions and very much stressed the short term long term distinction.<br /><br />What was new in Lucas 1972 is that, in that model, the long term is reached instantly -- the expected value of output the next period is constant. Next period means (at most) next month. This was very new. Earlier economists had the perception that fluctuations lasted longer than a month. It took over a decade for macroeconomists to note that this implied that Lucas's model was not a good approximation to reality.<br /><br />Certainly this makes me think of breaking paths and other things, but I do not consider it scientific progress.Roberthttps://www.blogger.com/profile/14455788499385673507noreply@blogger.comtag:blogger.com,1999:blog-3621026.post-13800869083807189662015-09-08T13:38:01.477+02:002015-09-08T13:38:01.477+02:00I think Lucas 72 was pathbreaking in that it chang...I think Lucas 72 was pathbreaking in that it changed how we think about equilibrium, monetary policy, and the long-run vs short-run distinction. We had to think about the policy rule, not policy actions. Even though the particular theory of business cycles didn't pan out, the way of thinking about policy stuck with us.<br /><br />(But I guess any serious historian of thought can come up with some other economist who said it earlier.)<br /><br />But I totally agree that Dixit-Stiglitz is in a different ballpark -- "Here's a neat tractable utility function for doing models with imperfect competition" is not like the Solow Growth model.<br /><br />The three papers are so different, it's really hard to use them as a measure of tribal affiliation.Nick Rowehttps://www.blogger.com/profile/04982579343160429422noreply@blogger.comtag:blogger.com,1999:blog-3621026.post-35600799998978555562015-09-08T12:10:29.602+02:002015-09-08T12:10:29.602+02:00To Samuelson and Solow 1960 . An old post edited ...To Samuelson and Solow 1960 . An old post edited down by Brad<br />http://delong.typepad.com/sdj/2013/07/robert-waldmann-policy-relevant-macro-is-all-in-samuelson-and-solow-1960.htmlRoberthttps://www.blogger.com/profile/14455788499385673507noreply@blogger.comtag:blogger.com,1999:blog-3621026.post-53323596460126434762015-09-08T10:10:56.014+02:002015-09-08T10:10:56.014+02:00"but I think the right direction to go now is..."but I think the right direction to go now is back to before Lucas 1972. "<br /><br />How far back would you go?<br /><br />HenryAnonymousnoreply@blogger.com