Must-Read: Paul Krugman: Sarcasm and Science
Must-Read: I think Paul Krugman gets one wrong today:
: Sarcasm and Science: “Paul Romer… [thinks] Lucas and his followers were driven into their adversarial style…
…by Robert Solow’s sarcasm:
I suspect that it was personal friction and a misunderstanding that encouraged a turn toward isolation…. They circled the wagons because they thought that this was the only way to keep the rational expectations revolution alive…
It’s true that people can get remarkably bent out of shape at the suggestion that they’re being silly and foolish…. But Romer’s account of the great wrong turn [in Chicago economics] still sounds much too contingent to me, and not just because, as he himself says, rational expectations quickly took over much modeling at MIT….
As I perceived it… there were two other big factors. First, there was a political component. Equilibrium business cycle theory denied that fiscal or monetary policy could play a useful role in managing the economy, and this was a very appealing conclusion on one side of the political spectrum. This surely was a big reason the freshwater school immediately declared total victory over Keynes… and why it could not back down when the… doctrine was found wanting.
Second… was the toolkit factor. Lucas-type models introduced a new set of modeling and mathematical tools… that required a significant investment of time and effort to learn… [and] let you impress everyone with your technical proficiency. For those who had made that investment, there was a real incentive to insist that models using those tools, and only models using those tools…
But New Keynesian models use those tools! And full-fledged RBC-DSGE models use a quite different set of tools, derived from Prescott’s papers rather than Lucas’s! And those who used those tools best of all–most incisively and creatively, cough, Rudi Dornbusch, cough–had absolutely no tolerance for the bullshit at all. And besides, as Paul Krugman often notes, the intrusion of Lucas-silliness into international macroeconomics got nowhere.
Not to mention: Milton Friedman’s rhetorical style was more finely-honed to draw blood than Robert Solow’s. Chicago was always most famous as a place with a style that was notoriously the most adversarial in economics. Why would anyone who had faced a Stigler or a Friedman have any reason to fear a Samuelson or a Solow?