tag:blogger.com,1999:blog-17232051.post3910961751755208861..comments2024-03-18T22:32:52.802-04:00Comments on Noahpinion: How should theory and evidence relate to each other?Noah Smithhttp://www.blogger.com/profile/09093917601641588575noreply@blogger.comBlogger20125tag:blogger.com,1999:blog-17232051.post-37231160955962188482017-06-04T16:17:28.952-04:002017-06-04T16:17:28.952-04:00No. Given that economics is basically a social sci...No. Given that economics is basically a social science and its recommendations are sometimes/often used to guide social policy, it cannot be free of value propositions (science can't be either). Even the basic questions of taxation take on an ethical/social dimensions when you ask "who is deserving of wealth?". Few conclusions in economics (if implemented) don't also carry often severe social consequences, so discussing economics without an ethical question (is it kind?) is kind of shortsighted.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-14411683055128458302017-05-20T14:06:51.626-04:002017-05-20T14:06:51.626-04:00Noah, thanks for the great post. I agree combining...Noah, thanks for the great post. I agree combining theory and empiricism is the key. I think economics is all about a 2 step process:<br /><br />1. Make an economic statement (includes all models and theories)<br />2. Determine validity of the statement<br /><br />I think it's important that economists take a step back and realize all they're doing is this 2 step process.Alex Peekhttps://www.blogger.com/profile/16599952608457953713noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-37130183634522481432017-05-17T02:17:52.682-04:002017-05-17T02:17:52.682-04:00GW
You say: “I’d recommend closely reading and tr...GW<br /><br />You say: “I’d recommend closely reading and translating Blanchard’s ”<br /><br />That is not such a good idea. Blanchard, too, is in deep methodological confusion. For details see:<br /><br />From the pluralism of false models to the true economic theory<br />http://axecorg.blogspot.de/2017/04/from-pluralism-of-false-models-to-true.html<br /><br />Eclecticism, anything goes, and the pluralism of false theories<br />http://axecorg.blogspot.de/2016/08/eclecticism-anything-goes-and-pluralism.html<br /><br />Getting out of IS-LM = Getting out of despair<br />http://axecorg.blogspot.de/2016/06/getting-out-of-is-lm-getting-out-of.html<br /><br />Egmont Kakarot-HandtkeAXEC / E.K-Hhttps://www.blogger.com/profile/10402274109039114416noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-65358864745260370812017-05-16T09:47:07.030-04:002017-05-16T09:47:07.030-04:00One class of models that combines structural theor...One class of models that combines structural theory and empricis is...(your favorite)...DSGE models. Of course, at present, they are of limited use for forecasting, but that's largely because the problem of building and fitting a structural macro model is so hard, so we still have other types of models for other tasks. <br /><br />Noah, instead of re-inventing the wheel every post, I'd recommend closely reading and translating Blanchard's<br /><br />https://piie.com/blogs/realtime-economic-issues-watch/need-least-five-classes-macro-models<br /><br />for the masses.GWhttp://economics.illinoisstate.edu/gawater/default.shtmlnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-90511788604798865902017-05-16T07:44:41.335-04:002017-05-16T07:44:41.335-04:00Smart young empirically-minded economists: another...Smart young empirically-minded economists: another vain hope<br />Comment on Noah Smith on ‘How should theory and evidence relate to each other?’<br /><br />Economics fits perfectly Feynman’s description of a cargo cult science: “They’re doing everything right. The form is perfect. ... But it doesn’t work. ... So I call these things cargo cult science, because they follow all the apparent precepts and forms of scientific investigation, but they’re missing something essential.”<br /><br />Economics have realized that science consists of two components theory and evidence: “Research is in fact a continuous discussion of the consistency of theories: formal consistency insofar as the discussion relates to the logical cohesion of what is asserted in joint theories; material consistency insofar as the agreement of observations with theories is concerned.” (Klant)<br /><br />But for some reason, economists do not get the two components properly together.#1 With regard to the criteria of material and formal consistency economics is a failed science.<br /><br />Currently, economists are in the mode of thorough self-critique. Yes, we have done too much math, yes, there has been too much abstract model building and too little empirics, etc. But then, this was what ‘thinking like an economist’ was meant to be: “It is a touchstone of accepted economics that all explanations must run in terms of the actions and reactions of individuals.” (Arrow)<br /><br />Economists readily admit obvious blunders. But then these are declared the faults of the old guard and now the smart young economists are on the right track. Fact is, though, that the new guard, just like the old, does not really understand what science is all about.<br /><br />Science is about general and invariant features of reality. In marked contrast, history is about unique event configurations on the surface which never repeat themselves. Science abstracts from all spatio-temporal details, which are so dear to the commonsenser and realist, because NO way leads from the history of falling apples to the universal Law of Falling Bodies. Nozick defines invariance in general terms: “An objective fact is one that is invariant under all admissible transformations.”<br /><br />Non-scientists and historians are glued to the ever changing surface, so they produce stories while scientists try to get hold of the underlying structure and produce laws=invariances. Economists are dimly aware of this: “That’s a good reason to want a good structural model.” (Noah Smith)<br /><br />The lethal defect of economics is that it is microfounded, i.e. based on behavioral axioms.#2 Now it holds that (i) there is NO such thing as an invariant of human behavior, and (ii), NO way leads from the explanation of human nature/behavior/action to the explanation of how the economic system works.<br /><br />Economics is NOT at all about human behavior, this is the subject matter of psychology, sociology, anthropology, biology, political science, etc., but about the behavior of the economic system. By consequence, economics has to be macrofounded.#3<br /><br />Economics has to step down as fake Queen of the so-called social sciences in order to eventually become a honorable member of the system sciences. This paradigm shift, clearly, is beyond the means of Noah Smith’s ‘smart young empirically-minded economists’.<br /><br />Egmont Kakarot-Handtke<br /><br />#1 See ‘What is so great about cargo cult science? or, How economists learned to stop worrying about failure’<br />http://axecorg.blogspot.de/2017/05/what-is-so-great-about-cargo-cult.html<br /><br />#2 See also ‘The happy end of the social science delusion’<br />http://axecorg.blogspot.de/2015/09/the-happy-end-of-social-science-delusion.html<br /><br />#3 See ‘True macrofoundations: the reset of economics’<br />http://axecorg.blogspot.de/2017/05/true-macrofoundations-reset-of-economics.htmlAXEC / E.K-Hhttps://www.blogger.com/profile/10402274109039114416noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-66687738231511245432017-05-16T04:28:53.140-04:002017-05-16T04:28:53.140-04:00You said "Oooh, Hamermesh used the s-word! Ha...You said "Oooh, Hamermesh used the s-word! Harsh, man. Harsh."<br />I agree. A good illustration as to why it is harsh is given by Angus Deaton. In struggling to explain the findings that Case and he have found, he referred to a book by a sociologist about family life in a rust belt community. The combination of economic and social analysis get us closer to an answer in many cases. Alan H<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-85021330787083576442017-05-16T00:06:35.705-04:002017-05-16T00:06:35.705-04:00Every time someone says "I will use zzz as an...Every time someone says "I will use zzz as an instrument..." they are making theoretical claims. Imagine a linear model. A valid instrument should not be correlated with the error term. What is the error term. Many, perhaps most economic phenomena have multiple causes, several distinct paths leading to a particular outcome. The economist chooses one to estimate. The other causal pathways are lumped into the error term. So for an instrument to be valid, it should not be part of some other causal path. In fact, it should be a good instrument for a variable in some other causal path. You cannot successfully defend an instrument without discussing various causal explanations and either dismissing them or arguing that they are independent from your instrument. This discussion, rarely done, is theoretical in nature. I don't care one way or the other about equation manipulation, but I do care about implicit causal claims that are taken for granted and never defended.Anonymoushttps://www.blogger.com/profile/01159421019141154724noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-66109317992909947022017-05-15T12:31:42.151-04:002017-05-15T12:31:42.151-04:00In addition to the point Timothy Duignan makes abo...In addition to the point Timothy Duignan makes about the experimental vs. theory specialization in the physical sciences, there is also a third category: phenomenology. It is usually non-trivial to translate and interesting theoretical speculation into a doable experiment. Phenomenologists work with both theorists and experimenters to figure out ways to test new theories.Rich Chttps://www.blogger.com/profile/11768615623375545324noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-91999905371540771712017-05-15T12:14:30.599-04:002017-05-15T12:14:30.599-04:00This disconnect is obviously structural to the fie...This disconnect is obviously structural to the field. There is absolutely no incentive or need to make good models. That's what you get when a field is a self-referential talkathon. There is no penalty or consequences when models do no perform out of sample. Actually, there is no awareness for any such need.<br />You guys get paid your little salaries no matter what, so why screw with the good thing?<br /><br />The empirical revolution will make things even worse. We are going to see billions of studies going in circles. The noise rider empire will live off of the public purse forever.Krzyshttps://www.blogger.com/profile/15794655390770135247noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-34337579314180114132017-05-15T09:49:30.485-04:002017-05-15T09:49:30.485-04:00Hi John,
Do you have any links to some form of g...Hi John, <br /><br />Do you have any links to some form of go-to model for a question like this or is it mainly ad-hoc computation?<br /><br />Thanks.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-64842939225754896952017-05-15T08:46:45.715-04:002017-05-15T08:46:45.715-04:00I'm a dumb sociologist but I know it's Sta...I'm a dumb sociologist but I know it's Stata, not STATA. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-23963373228613674872017-05-14T12:24:22.959-04:002017-05-14T12:24:22.959-04:00To the extent a model is written to permit empiric...To the extent a model is written to permit empirical falsification, to the extent the norms of economics require such testability, and to the extent such tests get done and their results shape what's concluded, the model is scientific. <br /><br />To the extent that's not the case, models in economics more resemble religion with equations.Peter Brawleyhttps://www.blogger.com/profile/05325387867440817192noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-32019624965471662772017-05-14T11:59:28.812-04:002017-05-14T11:59:28.812-04:00"If you want to predict how fish populations ..."If you want to predict how fish populations will respond to an increase in pollutants, you use a structural, microfounded model based on ecology, biology, and chemistry, not a simple linear model based on some quasi-experiment like a past pollution episode." <br /><br />As someone who works in fish biology, I can say that this is just wrong. The response of fish populations to pollution depends on too many variables, many poorly known or unknown, for "microfounded" models to be very useful. Such models can tell you the consequences of how you think the world works, but will not tell you how it actually works. John Williamshttps://www.blogger.com/profile/05128533383785081362noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-27145950003098918102017-05-14T11:01:46.179-04:002017-05-14T11:01:46.179-04:00Is theory the siege tanks and empiricism the marin...Is theory the siege tanks and empiricism the marines?? I like this blog post, and as a former Starcraft addict I love the photo at the top, but I'm having a hard time figuring out what they have to do with each other.drwerewolfhttps://www.blogger.com/profile/17269175252875799774noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-4193782879758206692017-05-14T10:37:40.310-04:002017-05-14T10:37:40.310-04:00Good good, your training is almost complete. Yes,...Good good, your training is almost complete. Yes, feel the power of bayesianity.Benoit Essiambrehttps://www.blogger.com/profile/09777196965771952105noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-20133249937501617732017-05-14T09:19:26.622-04:002017-05-14T09:19:26.622-04:00"In other words, econ seems too focused on &q..."In other words, econ seems too focused on "theory vs. evidence" instead of using the two in conjunction." <br /><br />This was something that I learned in research methods in Sociology - that a model has to be grounded in theory (and have both validity and reliability). There was no research methods course in Economics.<br /><br />Overall, I agree with you about 80%. The 20% disagreement is mainly a point of philosophy: is economics a social science, or a natural science; because how do you fit "culture" (which is a regional phenomena) and "work ethics" into labor models? That cannot be answered without philosophical questions of the validity of universality in the social sciences - something that Sociology also grapples with. <br /><br />What I truly appreciate about this article however, is the fact that it is truly self-reflective within the discipline. It asks very important questions about what Economics is versus what it wants to be, where it wants to go, and how to get to a new philosophical location. Those are things worth thinking about in order to make the study of the allocation of resources a relevant field of study in the future. Dave Ashelmanhttps://www.blogger.com/profile/06433634026835149921noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-15993141010441801602017-05-14T03:11:58.250-04:002017-05-14T03:11:58.250-04:00This seem very misguided for something that wants ...This seem very misguided for something that wants to be a science. Shouldn't the first, and perhaps only, question be: is it true?Anonymoushttps://www.blogger.com/profile/12079889978314243927noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-89085277654643422262017-05-13T19:56:56.093-04:002017-05-13T19:56:56.093-04:00Hi, reading your post makes me think that the crit...Hi, reading your post makes me think that the criteria used to assess the work of young economists seems overly restrictive and narrow. <br /><br />I suggest three broad categories for judging the merit of work of economists: (a) Is it useful?, (b) Is it elegant?, (c) Is it kind?<br /><br />The last category (Is it kind?) seems somewhat neglected. That said, many economists from Adam Smith to Tony Atkinson and Amartya Sen have turned their minds to this category, which I suggest concerns justice and fairness, and building societies that are resilient against climate change, pandemics, poverty, persecution (giving rise to refugees), prejudice in all forms (ethnicity, sex, religion), illiteracy & ignorance, corruption & extraction. Kienhttps://www.blogger.com/profile/15643929814291369340noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-88225536935832560272017-05-13T18:04:03.375-04:002017-05-13T18:04:03.375-04:00Presumably some of of the problem is lack of speci...Presumably some of of the problem is lack of specialists. Scientists are generally either theorists or experimentalists. So you get a healthy balance of both types of work and the most high impact papers are where they collaborate. Economists seem to more exclusively identify as theorists which probably isn't healthy. Anonymoushttps://www.blogger.com/profile/03336996220652340076noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-43350918282925521352017-05-13T17:53:06.091-04:002017-05-13T17:53:06.091-04:00The way out is the research programme. Instead of ...The way out is the research programme. Instead of the random trickle of solo uncoordinated papers, list all the big Qs and puzzles and known unknowns about a given topic (along the lines you've followed for labour economics), hire a lot of researchers and build and test the models again and again until a reasonably complete knowledge is deemed to be acquired, do all the field research needed, involve anthropologists if needed, etc. Mini, focused Manhattan-projects. Sadly this requires government backing, not as much for the money but for the data access.eziblotnoreply@blogger.com