Who To Listen To (original) (raw)

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Who To Listen To

July 30, 2012 9:03 am July 30, 2012 9:03 am

Jonathan Portes has a nice little essay, which gets better than I have at the essential issue: it’s not just about the individual track record:

My answer to it is that policymakers and the public should listen to economists who fulfill two critera: first, they have made empirically testable predictions (conditional or unconditional – see Krugman here) that have proved, by and large, to be broadly consistent with the data; and second, they base those predictions on an analytic framework (not necessarily a formal model) that is persuasive. In other words, getting it right alone is not enough; it should be possible to show your workings – to explain why you got it right. Otherwise, your predictions may be interesting, but they tell you little about how to formulate policy.

Quite. Place not your faith in gurus, even if they got some big stuff right — and that goes for me, too. It’s always about the model, not the man.

Lots more interesting stuff in the piece. Go read.

PS: One side note: One thing that’s striking in Portes’s discussion — and something I very much agree with — is the irrelevance of formal credentials. As we’ve debated how to deal with the worst slump since the 1930s, a distressing number of economists have taken to arguing on the basis that they have fancy degrees and you don’t — or in some cases that well, you may have a fancy degree too, and even a prize or two, but in the wrong sub-field, so there.

But all this counts for very little, especially when macroeconomics itself — or at any rate the kind of macroeconomics that has dominated the journals these past couple of decades — is very much on trial. And note Portes’s praise for Martin Wolf, which I heartily second; Wolf doesn’t even have a PhD. And that matters not at all; what he has is a keen sense of observation, a level head, and an open mind, all attributes lacking in far too many of my colleagues.