I avoide re-posting any other author in this blog. However, this post (see below in red) from Paul Krugman deserves to be reposted one-to-one becasue I agree with many of his statements on macroeconomics. At the same time, Paul needs to make a step ahead and to look at the principal problem of macroeconomics as a science - the absence of quantitative justification and the direct rejection of empirical proof as the tool of the macroeconomics progress. When one cannot measure the progress of a science in quantitative terms - this progress cannot be seen. Hence, economics has to open itself for a criticism from the broader scientific society before it becomes a second rate sect, which is very close to be the truth.
Does Economics Still Progress?
In a few hours Sylvia Nasar and I will have an on-stage dialogue at the 92nd Street Y, centered around her new book The Grand Pursuit, which offers a set of fascinating portraits of the makers of economics. (Irving Fisher invented the Rolodex?) But as I was reading her book I have to admit that I found myself wondering whether there’s much to celebrate.
I’ve never liked the notion of talking about economic “science” — it’s much too raw and imperfect a discipline to be paired casually with things like chemistry or biology, and in general when someone talks about economics as a science I immediately suspect that I’m hearing someone who doesn’t know that models are only models. Still, when I was younger I firmly believed that economics was a field that progressed over time, that every generation knew more than the generation before.
The question now is whether that’s still true. In 1971 it was clear that economists knew a lot that they hadn’t known in 1931. Is that clear when we compare 2011 with 1971? I think you can actually make the case that in important ways the profession knew more in 1971 than it does now.
I’ve written a lot about the Dark Age of macroeconomics, of the way economists are recapitulating 80-year-old fallacies in the belief that they’re profound insights, because they’re ignorant of the hard-won insights of the past.
What I’d add to that is that at this point it seems to me that many economists aren’t even trying to get at the truth. When I look at a lot of what prominent economists have been writing in response to the ongoing economic crisis, I see no sign of intellectual discomfort, no sense that a disaster their models made no allowance for is troubling them; I see only blithe invention of stories to rationalize the disaster in a way that supports their side of the partisan divide. And no, it’s not symmetric: liberal economists by and large do seem to be genuinely wrestling with what has happened, but conservative economists don’t.
And all this makes me wonder what kind of an enterprise I’ve devoted my life to.