tag:blogger.com,1999:blog-17232051.post4311842430050125786..comments2024-03-28T03:16:14.104-04:00Comments on Noahpinion: The Agrarian RevoltNoah Smithhttp://www.blogger.com/profile/09093917601641588575noreply@blogger.comBlogger35125tag:blogger.com,1999:blog-17232051.post-19844717626309195362014-12-21T08:19:28.001-05:002014-12-21T08:19:28.001-05:00Trollstoy and NoahOpinion ;) LOL :) LOVE IT :) ABS...Trollstoy and NoahOpinion ;) LOL :) LOVE IT :) ABSTRUCE = ABSTRACTED OBTUSITY ;)<br />LOLOL Just My Analyisis or YOURanalysis or URanaylisis LOLOL ')<br />Live Music Addicthttp://www.facebook.com/LiveMusicAddictnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-1232235300596159862014-12-19T06:09:53.043-05:002014-12-19T06:09:53.043-05:00A pathetic response. I think part of the problem i...A pathetic response. I think part of the problem is that Farmer anticipated the counter-response: "All models are wrong". OK if you think these implications of a major inconsistency in your model not important in the bigger scheme of things but just necessary for calibration purposes, just say so. By not responding you are just confirming everyone's worse fears that the economics profession is a closed shop centred around the two cliques of Chicago/Minnesota and MIT, that is not open to questions, ideas and knowledge from outside unless it is on their terms. (The first (NewClassical) goes for consistency, which while empirically dubious, is at least transparent; the latter (New Keynesian) is ad-hoc, messy and actually neither succeeds empirically or logically - and I think is the worse of the two.) <br /><br />There are some questions about Farmer's attempt to merge real Keynesian economics and Walrasian economics and whether he will do a better job than the Neo-Classical Synthesis - we will get to that later, but first there is the small matter of Say's Law.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-20959029259278893252014-12-19T05:52:15.828-05:002014-12-19T05:52:15.828-05:00Short answer: yes, 19th century economies were inc...Short answer: yes, 19th century economies were incredibly volatile, to the extent we can tell from the rough data available.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-36582626735152345912014-12-18T19:48:13.873-05:002014-12-18T19:48:13.873-05:00It is well to remember John Von Neumann ( who was ...It is well to remember John Von Neumann ( who was much smarter than any of us) on parameter fitting:<br /><br />"<i>With four parameters I can fit an elephant, and with five I can make him wiggle his trunk.</i>"Absalonhttps://www.blogger.com/profile/09131268683451462949noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-48644607718237989772014-12-18T12:35:59.796-05:002014-12-18T12:35:59.796-05:00The bronze age collapse in the Eastern Mediterrane...The bronze age collapse in the Eastern Mediterranean, Fall of the Roman Empire, Kipper und Wipper, Tulips, South Sea bubble, famines - economies did not remain stable. It is however probably true that the complexity of the modern economy has created some new, interesting, ways for economies to go through periodic booms and busts. Absalonhttps://www.blogger.com/profile/09131268683451462949noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-83382095995623947752014-12-18T12:29:56.071-05:002014-12-18T12:29:56.071-05:00Right. The second half of the quote is critical. ...Right. The second half of the quote is critical. Only an idiot would trot out just half of the Box quote.Absalonhttps://www.blogger.com/profile/09131268683451462949noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-37525478754192749292014-12-18T00:11:46.163-05:002014-12-18T00:11:46.163-05:00The only question is how economies stayed stable f...The only question is how economies stayed stable for centuries without the benefit of the sophisticated policies and econometric methods. Or was it all chaos before with unemployment diverging wildly left and right?Krzyshttps://www.blogger.com/profile/15794655390770135247noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-4617283764627570802014-12-18T00:11:34.509-05:002014-12-18T00:11:34.509-05:00The only question is how economies stayed stable f...The only question is how economies stayed stable for centuries without the benefit of the sophisticated policies and econometric methods. Or was it all chaos before with unemployment diverging wildly left and right?Krzyshttps://www.blogger.com/profile/15794655390770135247noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-87629644285928574552014-12-17T16:32:41.237-05:002014-12-17T16:32:41.237-05:00I doubt the webmaster is "on board" with...I doubt the webmaster is "on board" with Farmer or anyone else. But the questions he raised were good, and they deserve some kind of response, preferably a substantial one. <br /><br />I have a feeling though that unless the questions come from other members of the Stanley Fischer MIT claque the response to the "Agrarian Revolt" will be "the peasants are revolting and let them eat cake."Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-69142528438698063932014-12-17T12:15:00.440-05:002014-12-17T12:15:00.440-05:00I didn’t see Farmer say whether or not he thinks t...I didn’t see Farmer say whether or not he thinks the US is heading towards full unemployment. Maybe I didn’t read far enough back on his blog.<br /><br />But to me, it would seem awfully silly to stake out a position right now that the US is not heading for full employment. We’re objectively moving in that direction. If we don’t get there, then I’ll be ready to talk about why not. For now we’re getting there.<br /><br />It’s easy to agree that everything is always adjusting and nothing ever goes back to the past. In a sense the unemployment rate is always in a kind of equilibrium – the same kind of momentary equilibrium that stock prices are always in at any moment in time, the level where buying and selling forces equal. So if the unemployment spends a few months at 10% then starts falling, you could say it spent a few months at a high equilibrium.<br /><br />But once you start using phrases like permanent or stable equilibrium, then you are talking about the sort of lasting equilibrium that, say, a gas and liquid eventually re-attain after some jolt disturbed their former one. To empirically support that kind of stable high unemployment equilibrium you’ve got to have a prolonged period of at least roughly stable high unemployment. The current US situation just does not have it.<br /><br />It’s not only the old classical theorists who posited unrealistic quick returns to past trends. What I have against Krugman and De Long is they imagine that if only aggregate demand were quickly fiscal-policied back up to the old growth trend line after any slowdown or recession, the economy would continue growing along its old trend as if nothing ever happened. That to me is so utterly preposterous I suspect it’s nothing more than snake oil salesmanship – a dreamy-sounding promise that no one will ever be able to prove your medicine couldn’t have achieved, if only not for …. (fill in the blank). I’m not accusing Farmer of being that kind of Keynesian, but I get the feeling he might be.<br />Tomnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-22842410208582665032014-12-17T07:30:59.757-05:002014-12-17T07:30:59.757-05:00You are only a failure if you give up :-)You are only a failure if you give up :-)Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-79425771630112285552014-12-17T01:29:32.673-05:002014-12-17T01:29:32.673-05:00"I think a slow adjustment after a recession,..."I think a slow adjustment after a recession, which is what we've been experiencing, is not at all the same thing as absence of adjustment."<br /><br />Adjustment to what? I think this is semantics. Economists seem to always see things in terms of "adjustment" to a new equilibrium. But in many ways this is artificial. Think of it like an historian. Or a Marxist. What I think Farmer is saying is not that we do not have adjustment, what we are having is an adjustment to new equilibrium, which is not a full employment equilibrium. An historian (and a Marxist) who does not use this artificial framework would just see this as issues relating to the dynamics of capitalism - with many factors that are causing it (this may be the irrationality of actors guided and deflation psychology - called animal spirits, it might even be welfare systems which create rigidities in the labour market and therefore price rigidity, it could be the end of a long period associated with post WWII recovery and associated productivity and multiplier effects, it could the entry of China into the system changing relative terms of trade effects and worldwide capital/labour ratios between countries etc...). It is fine to use these frameworks as a supplement to your analysis (as long as you do not believe it is fact), but the history and what is going on in the international capitalist system itself and how this affects macro-policy is what is important.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-49000177746249938132014-12-16T23:27:15.177-05:002014-12-16T23:27:15.177-05:00And just to clarify one point, I think a slow adju...And just to clarify one point, I think a slow adjustment after a recession, which is what we've been experiencing, is not at all the same thing as absence of adjustment. Equating the two as Krugman and De Long do is wrong if not disingenuous, and though I don't see Farmer explicitly doing that, I get the feeling he might.Tomnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-81419196701066154162014-12-16T23:19:33.732-05:002014-12-16T23:19:33.732-05:00What I like most about Farmer is that he is a Keyn...What I like most about Farmer is that he is a Keynesian trying to steer Keynesians away from sticky prices. Sticky wages and prices are real and contribute to recessions, but they’re an exacerbating factor not the driving force. I don’t see any evidence that he understands the driving force of recessions or anything about the credit cycle, and though that’s typical of academic Keynesians and not really a mark particularly against him, he would be in better standing to make the parrot joke if he showed some savvy about the world he’s trying to model and didn’t come off like an ivory tower model tinkerer.<br /><br />As for his “search” model, I like the name. One of the main things economists need to confront is how slow a sophisticated economy is to absorb slack. Hiring is long-term team-building and tied to capital and organizational investments. Switching careers is very hard, especially after about 45. People are affluent and have family and public safety nets, most don’t have to work at McDs even if that’s all they can find. The math of the model appeared to contain no insights. But the name is good. Much better than “sticky wages.”<br /><br />As for high-unemployment equilibriums, or at least high labor slack equilibriums, sure. In my experience, characteristic of weak economies with young adult bulges.<br /><br />As for “animal spirits,” sounds like a phlogiston to me.<br />Tomnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-20612104155405753342014-12-16T22:30:16.382-05:002014-12-16T22:30:16.382-05:00'from "it is too complicated to model so ...'from "it is too complicated to model so lets treat it as exogenous to our model" people went to "let's assume it is exogenous to our economy and therefore not affected by policy". From we know nothing to we make very strong assumptons.'<br /><br />Good point.<br />Good pointTomnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-42865285205922322482014-12-16T14:48:53.281-05:002014-12-16T14:48:53.281-05:00I AM A FAILURE :-(I AM A FAILURE :-(Noah Smithhttps://www.blogger.com/profile/09093917601641588575noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-47694850540346429912014-12-16T14:02:29.392-05:002014-12-16T14:02:29.392-05:00"Fed run MP by buying stocks, instead of Trea..."Fed run MP by buying stocks, instead of Treasuries."<br /><br />Great post by Farmer, but I would be against such credit policy - there are good reasons why central banks only conventionally use short term treasury debt.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-36337998667676392362014-12-16T13:57:22.772-05:002014-12-16T13:57:22.772-05:00The silence is unsettling. It is time for both of ...The silence is unsettling. It is time for both of these guys to come clean on Say's Law.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-40139613224330426552014-12-16T11:51:59.498-05:002014-12-16T11:51:59.498-05:00Silly topic.... If a girl is hot enough to be a mo...Silly topic.... If a girl is hot enough to be a model, no one is going to care if she is wrong. Everyone is just going to laugh and agree with her no matter what she says. <br />Derivsnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-72879407648351095132014-12-16T06:02:17.413-05:002014-12-16T06:02:17.413-05:00Still waiting for what you will do next Noah, sinc...Still waiting for what you will do next Noah, since you haven't succeed to start a blog-war yetAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-15533922770621433842014-12-15T22:31:35.397-05:002014-12-15T22:31:35.397-05:00facepalm timefacepalm timeAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-63747937961598129872014-12-15T16:30:42.895-05:002014-12-15T16:30:42.895-05:00I would pay anything for an skyrim expansion where...I would pay anything for an skyrim expansion where you can be or meet (kill) krugman, mankiw, noah, that history professor from harvard, cochrane, scott sumner etc.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-43511792028402232912014-12-15T15:32:49.561-05:002014-12-15T15:32:49.561-05:00GoodGoodAnonymoushttps://www.blogger.com/profile/06056707563978310962noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-28704036831072749102014-12-15T14:51:19.511-05:002014-12-15T14:51:19.511-05:00Time for a macro wars Skyrim modw... who wouldn...Time for a macro wars Skyrim modw... who wouldn't want to see Krugman foosing dragons?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-25959650242427164312014-12-15T14:29:09.607-05:002014-12-15T14:29:09.607-05:00"All models are wrong" is only half the ..."All models are wrong" is only half the quote (which Box did say on numerous occasions, see: Box & Draper (1987), Empirical model-building and response surfaces, Wiley, p. 424). The other half is "but some are useful". What is implied by this (although Box politely didn't say it out loud), is that <i>most models are not useful for much of anything</i>. That is the real (pun intended) problem with RBC. Anonymousnoreply@blogger.com