The MIT Gang • Hacker News Board

Re: The MIT Gang

#21

Post by yummyfajitas » Sat, Jul 25, 2015, 7:07 PM UTC

eutectic wrote: post #7

overpaidgoogler wrote: post #2

The distinction is usually referred to as saltwater vs freshwater economists (referring to the geographical location of the university's). Apart from MIT there is also Princeton and Stanford in the saltwater camp. And Krugman is right that the saltwater economists were vindicated by the recovery from the GFC. However Krugman is not a good spokesperson for saltwater economists. Most econ professors I know from saltwat…

Can you give specific examples of other economists making better predictions than Krugman by avoiding the mistakes you claim he makes?

Scott Sumner's been pretty spot on.

Krugman predicted austerity of 2013 would hurt. It didn't.

http://krugman.blogs.nytimes.com/2013/04/28/monetarism-falls...

http://econlog.econlib.org/archives/2014/01/the_parrot_is_s.... http://econlog.econlib.org/archives/2015/01/the_cbos_foreca....

Krugman predicted the sequester would cost 700,000 jobs.

http://www.nytimes.com/2013/02/22/opinion/krugman-sequester-...

I can't dig it up, but Sumner claimed it would not provided NGDP didn't fall (i.e., the fed caused a monetary offset). You'll never guess what happened next.

Re: The MIT Gang

#22

Post by yummyfajitas » Sat, Jul 25, 2015, 7:13 PM UTC

eutectic wrote: post #18

overpaidgoogler wrote: post #14

Earlier quoted context omitted.

First, can you describe what the predictions were and what you consider their significance to be?

The economic slowdown could last 5-10 years and cost trillions of dollars (June 2009): http://news.bbc.co.uk/1/hi/business/8081813.stm Semi-prediction of a housing bubble (August 2002): http://www.nytimes.com/2002/08/02/opinion/dubya-s-double-dip... Inflation and interest rates will remain low in in spite of stimulus and QE (many times). A diagnosis of potential problems with the euro, many of which have come to pass…

A better question would be, "what predictions did Krugman make which disagreed with non-Keynesians that turned out right (or wrong)?"

Various ideological enemies of Krugman made these same predictions. All you are really saying is that Krugman, along with everyone else, gets the easy ones right.

Re: The MIT Gang

#23

Post by slowmovintarget » Sat, Jul 25, 2015, 7:21 PM UTC

nolepointer wrote: post #13

eutectic wrote: post #8

Earlier quoted context omitted.

What do you think are his political views, and how do they influence his economic writing?

It's not evident by the article, but his blog [0], in which this article appears, is titled "The Conscience of a Liberal." Make of that what you will. [0] http://krugman.blogs.nytimes.com/

He painted Milton Friedman as a radical in the top post's article ("radical free-market ideology", "Chicago School", "Milton Friedman's 'win'").

The idea that free-market proponents in the 70s and 80s were "radical" is at best a lie, and at worst revisionist history.

Re: The MIT Gang

#24

Post by afarrell » Sat, Jul 25, 2015, 7:42 PM UTC

washedup wrote: post #5

overpaidgoogler wrote: post #2

The distinction is usually referred to as saltwater vs freshwater economists (referring to the geographical location of the university's). Apart from MIT there is also Princeton and Stanford in the saltwater camp. And Krugman is right that the saltwater economists were vindicated by the recovery from the GFC. However Krugman is not a good spokesperson for saltwater economists. Most econ professors I know from saltwat…

We really need a way to simulate how the economy will react under certain policies. The current model is based on one hypothesis about how the economy works, when such policies may have been only tested once or twice before, AND when the test conditions were different in a lot of ways. Because of the complex nature of economic systems, prediction is extremely difficult. We have yet to see if the monetary policies bei…

You should take a look at the Open Source Policy Center: http://www.ospc.org/ We just released an application for predicting the effects of changes to the tax code.

https://github.com/OpenSourcePolicyCenter/webapp-public

Re: The MIT Gang

#25

Post by Tycho » Sat, Jul 25, 2015, 7:48 PM UTC

Does anyone here take Krugman seriously?

Re: The MIT Gang

#26

Post by DanielBMarkham » Sat, Jul 25, 2015, 7:51 PM UTC

washedup wrote: post #5

overpaidgoogler wrote: post #2

The distinction is usually referred to as saltwater vs freshwater economists (referring to the geographical location of the university's). Apart from MIT there is also Princeton and Stanford in the saltwater camp. And Krugman is right that the saltwater economists were vindicated by the recovery from the GFC. However Krugman is not a good spokesperson for saltwater economists. Most econ professors I know from saltwat…

We really need a way to simulate how the economy will react under certain policies. The current model is based on one hypothesis about how the economy works, when such policies may have been only tested once or twice before, AND when the test conditions were different in a lot of ways. Because of the complex nature of economic systems, prediction is extremely difficult. We have yet to see if the monetary policies bei…

We also could use a way to simulate how the various stock and commodity markets will perform in the future.

This is just the same problem, looked at from a different angle.

Re: The MIT Gang

#27

Post by guelo » Sat, Jul 25, 2015, 7:56 PM UTC

I don't understand how conservative economists who have been constantly predicting runaway inflation since 2008 have any credibility remaining.

Re: The MIT Gang

#28

Post by jbuzbee » Sat, Jul 25, 2015, 7:57 PM UTC

pmorici wrote: post #4

It's hard to take anything Krugman writes seriously. All his writing is so intertwined with his politics It's impossible to sort the factually sound parts from the rest and he has a track record of saying some truly wrong things with great conviction.

I always assumed that his Nobel prize was more due to the awarding committee wanting to support his political views rather than any real economic insight. Pretty much like how Obama was given the Peace Prize when the nominations were due when he had only been in office a few months. Politics, all politics.

Re: The MIT Gang

#29

Post by guelo » Sat, Jul 25, 2015, 8:07 PM UTC

overpaidgoogler wrote: post #2

The distinction is usually referred to as saltwater vs freshwater economists (referring to the geographical location of the university's). Apart from MIT there is also Princeton and Stanford in the saltwater camp. And Krugman is right that the saltwater economists were vindicated by the recovery from the GFC. However Krugman is not a good spokesperson for saltwater economists. Most econ professors I know from saltwat…

How is trade not a big part of macroeconomics? That's a dumb thing to says.

On your debt crisis points, it makes all the difference if the debt is denominated in the country's own currency or not.

Re: The MIT Gang

#30

Post by stevedekorte » Sat, Jul 25, 2015, 8:15 PM UTC

Inflation did not remain low, it just went into the capital markets and luxury goods first because all the new money (~$3T so far) was effectively handed to big finance to buy their junk bonds above market prices. The wealthy can only consume so much in basic consumer goods (steaks, coffee, paper towels, soap, etc) so we wouldn't expect consumer prices to increase immediately, but we can expect them to increase inevitably. Had the newly printed money been sent to each citizen instead, consumer prices would have risen almost immediately.