Walk-out from Greg Mankiw’s Class

http://hpronline.org/campus/an-open-letter-to-greg-mankiw/

” There is no justification for presenting Adam Smith’s economic theories as more fundamental or basic than, for example, Keynesian theory.”

Oh dear god these people, I swear i am so sick of these bloody neoMarxist/Keynesian numb-sculls, and btw managing to afford Harvard fees makes you part of the “1%” not the “99%”

sigh

The letter is a sad effort. On past form, I’d say Berkeley, Paris or Chicago are more likely to produce an intelligent radical response to the GFC than Harvard. If this is anything to go by, Mankiw has indeed failed to instruct them:

Harvard graduates play major roles in the financial institutions and in shaping public policy around the world. If Harvard fails to equip its students with a broad and critical understanding of economics, their actions are likely to harm the global financial system. The last five years of economic turmoil have been proof enough of this.

If the financial institutions demand recruits who are intelligent, hard-working and utterly devoid of scruple there will always be an adequate supply, whether Harvard participates or not.

I was struck by the quality of writing in the letter itself, composed by students persumably aged 18 or 19 years old. No bad grammar, no poorly organised thoughts. No waffle. Concise, short and relevant sentences.

My experience of young Irish students – be they from TCD, UCD or elsewhere – is that they are incapable of writing anything at this level. Their exam scripts are a nightmare – spelling a joke, structure non-existent. They have limited vocabulary because they don’t read. At a certain level of abstract thinking, they are in fact functionally illiterate.

Outside of academia, there are a few IT journalists left who could make a job of writing something like that, but as for the Sindo or below, good night.

It’s good to know that somewhere, on the other side of the Pond, the English language is still alive and kicking.

If I had the ability I would commend a recent comment from the esteemed Mr. Bond of this parish to these ‘revolting’ students:
“Financial markets have messed up massively over the last decade, …but we have lived in a society that has demanded ever cheaper credit from our banks and ever greater returns from our savings/investments (and ever decreasing fees on such as well), that combination of “demands” implying that we either didn’t understand risk/reward trade off’s, or that we had solved for the ‘risk’ component of that equation, X increasingly equalling zero somehow. Remember, “ordinary citizens” benefitted massively from overly-cheap and overly-available credit, and while there is a very complicated debate about where the blame lies between bad-lenders and bad-borrowers, at least some blame lies with both parties as both of them benefitted from the credit super bubble.

The only real answer as to how this ‘worked’ is now quite clear in the financial market subsidisation or backstopping we have seen come to the fore in the last 4 years, this the necessary answer to a crisis which threatened (and still threatens) to dismantle many of the standard political and societal principles/frameworks (ever increasing wages, safe cheap/free pensions, generous social welfare) we have grown to assume are there forever (principally the general stability we have seen in the last 20 years).

I’m not saying this is right or this is how capitalism or economics should work, but I am surprised that so few understand this or saw/see it coming.”

While recognising that a relatively small proportion of economists specialise in the areas touched on here – though authors of widely-used general textbooks should probably be included, the economics profession is deserving of considerable pillory for failing to see, understand, analyse or highlights the problems that were mounting up. Part of it is due to the nature of academic funding where it profitted many economists to turn a blind eye to the underlying problems and to extoll the virtues of the perpetual motion machine the financial sector had crafted. And part may be due to the stylised, mathematicised models many economists employ that incorporate the required theoretical assumptions and allow for some empirical analysis, but are totally divorced from reality.

However, it would be far better for these ‘revolting’ students – and students everywhere – to ask the question the UK Queen posed to some UK economists: “Why did nobody see this coming?”. And to follow it up with: “What should be done now?”

But, ultimately, it is for economists to inform and for politicians and their voters to be informed. Many economists are culpable; but many politicians and voters are as much, if not more, so.

Via Henry at Crooked Timber, a piece about the #OWS library:

http://www.insidehighered.com/views/2011/11/02/essay-librarians-occupy-movement

@Shay,

You seem to have a well-developed ability to ask leading questions, but when your own assertions are queried there is radio silence.

@LD
INET and Soros himself are conducting an effective PR campaign. The goal is to change how economics is taught, in students they have found a receptive audience. INET will continue to gain traction until the economy turns around in the US. If helicopter Ben successfully reduces unemployment to 7% and falling then INET will have a tough row to hoe.

@Kevin Donoghue

The financial system is broken. Economics isn’t.

I’ll meet you half way, Economics is broken but shows signs of being repairable.

A considerable number of my political heroes are economists but it struck me recently that their most politically important work helping to undermine the assumptions of (do not sigh) “neoclassical” economics (Stiglitz’s daring attack on the potential benefits of state intervention in markets should have changed history). Krugman and Stiglitz for instance are important precisely because they represent an attack on the prevailing spirit of modern economics (in the period from 1970 on?).

As an exercise to check whether modern economics is broken or not I am going to do a Richard Tol and check the top twenty most cited economists as listed in http://ideas.repec.org/top/top.person.nbcites.html and see whether for the last economic crisis their contribution could have been said to either predict, ignore or cause the current crisis.

This might take me a few evenings, I am not an economist and have not even heard of eight of the worthies listed.

However I think there is a substantial chance that it might prove not only to be broken but dangerous. Do you think that is a reasonable think to do to check whether economics is broken or not?

http://gregmankiw.blogspot.com/2011/11/occupy-wall-street-comes-to-ec-10.html

Ironically, the topic for today’s lecture is the distribution of income, including the growing gap between the top 1 percent and the bottom 99 percent. I am sorry the protesters will miss it.

@Shay Begorrah: So you intend to trawl through the top 20 on REPEC so see what they had to say about the current Macro/Financial/Banking crisis? Maybe the reason some of them will have little to say is that they were working in areas such as Labour Economics, Health Economics, or a host of other areas with little to do (directly) with the crisis. Economics is a pretty broad church.

As part of my ‘informal’ undergrad studies in economics (UCD) I did a little data mining. Using the electronic resources available I trawled up the first volumes of some of the ‘more prestigious’ (that’s a value claim. by the way!) econ journals. Very, very interesting they were. It is also useful to trawl up Milton F and some of his chums. Then fast-forward to some of the contemporary stuff (or should that be guff).

Now, you have to understand that exponential increase in the info pile. So, one has to be a tad choosey. However, as far as the ECON 101 texts I was able to hunt down: they were similar, with one exception (Daly+Farley: Ecological Economics). But, jaysus, the cost! Mankiw wants $170!!! for the newest edition.

Presumably this is to discourage reading.

Doing a ‘quickie’ on that INET Curriculum: Not too impressed: ‘suppose its their Framing. You should start from economic outcomes and see if you can resurrect the theory. That would be fun(ier). Three years? Too short. Needs a min of 4 to reach any reasonable level of intellectual maturity. And that reading list! What IS IT about academics that they insist on such pretentious muddles? Do they ever reflect back and recognise the gulf between reading for reading, and reading for understanding? For a good laugh see: George Miller: The Magical No 7(plus or minus 2): Am J Psychol (I hope) 1956.

Try to imagine how biochemists attempted to understand some aspect of Intermediary Metabolism: a very, very complex subject indeed. They observed physiological outcomes and wondered WHY? Took 100 yrs, but they cracked it. Not, “Here’s your theory, now predict the outcome – and whatever Miltonian assumption your having yourself!”

Brian Snr.

@ Shay,

Steve Keen’s Debunking Economics, second edition, which I’m reading at present, is an instructive text on the sheer absurdity of “neoclassical” economics.

He cites Bezemer which will save you a few evenings work.

http://mpra.ub.uni-muenchen.de/15892/1/MPRA_paper_15892.pdf

Bezemer trawled through academic and media reports looking for people who had warned of the crisis.

His criteria:

-that they provided some account of how they arrived at their conclusion.
-went beyond predicting a real estate crash, also making the link to real sector recessionary implications, including an analytical account of those links.
-the actual prediction must have been made by the analyst and available in the public domain, and not just be asserted by others.
-the prediction had to have some timing attached to it.

He came up with twelve names:

Dean Baker, Wynne Godley, Fred Harrison, Michael Hudson, Eric Janszen, Jakob Brochner Madsen and Jens Sorensen, Kurt Richebacher, Nouriel Roubini, Peter Schiff, Robert Shiller, and Steve Keen.

He also identified four common aspects of their work:

1. a concern with financial assets as distinct from real sector assets,
2. with the credit flows that finance both forms of wealth,
3. with the debt growth accompanying growth in financial wealth, and
4. with the accounting relation between the financial and real economy.

If you wish to understand why the students walked out, there’s a potential answer. Given Mankiw’s textbook, I imagine none of those things are on their syllabus.

PS. I ain’t an economist either, and I don’t feel guilty about commenting. To paraphrase, the economy is too important to be left to economists.

Sometimes you need a beginners mind to see the emperors lack of clothes. Well done to the students.

He came up with twelve names:

Dean Baker, Wynne Godley, Fred Harrison, Michael Hudson, Eric Janszen, Jakob Brochner Madsen and Jens Sorensen, Kurt Richebacher, Nouriel Roubini, Peter Schiff, Robert Shiller, and Steve Keen.

No mention of the crowd at Monthly Review.

http://monthlyreview.org/press/books/pb1849/

Sweezy and Magdoff were analysing the financial system and warning of the chaos for the last 30 years.

@Seafoid,

There are those who try to make capitalism work to generate socially and economically useful outcomes (Keynes is the father of this tradition) and those who seek to supplant or supercede it because they genuinely believe it is incapable of generating these outcomes (Hobsbawm et al). It is the failure of both of these sides to secure common ground that has contributed to the Neo-con hegemony of the last 30 years.

And the irony is that a programme based on a sensible staking out of the common ground between these sides would secure a democratic plurality in most developed economies. However, both sides would have to jettison some cherished ‘household gods’. But that’s out of the question, so let’s continue fighting, annoying voters and delivering them into the hands of the Neocons.

AFAIK the Post Autistic Economics movement came out of student reaction

http://www.paecon.net/

No idea how much of a following it has

@Kevin Donoghue,

“There’s a lot I don’t like about the economics profession, but bank auditors, directors, lawyers and regulators have far more to be ashamed of.”

+1 (and could extend that list far beyond the banking and financial sectors)

@ Shay Begorrah

I find attempting to keep an open mind tiring and wearying, and have found myself alarmingly now and again not even able to agree with myself.

I should stick to my life-long and very handy motto: ‘Never learn from experience.’

The INET curriculum looks interestingas a start. It would be nice if the academic economists here (ireland that is) were to think of something similar, or indeed to comment on same.

Last month a single experiment suggested that maybe something appeared to go faster than light. It was immediately front page news all over he world that the Theory of Relativity was over-thrown!

Contrast this with the Science of Economics.

The world may well have entered another Great Depression from around 2008, it appears the number of economists warning of it can be counted on the fingers of one hand, the IMF etc said everything was rosy back in 2007 , and you people think you can bad-mouth students who want to know what Economics has done since 2008 to redress its catastrophic blindness? What gives you people who have caused so much damage the right to snidely abuse these young economists, who have not yet f–ked up the world like the previous generation of economists?

Exactly how big a Depression would be needed for you people to admit the teeniest possiblibility that Economics has become meaningless PR for the ruling class (not the elite, not the 1% or some-such euphemism ), The Ruling Class.

You can cite stupidity if you want, but if it were only stupidity a lot more economists would have been correct about the insanity of economic policy for the last 25 years (the law of averages alone would have seen to that). The sheer consistency of the wrongness of economists can only be explained by a cynical bias towards the interests of the Ruling class, in the hope of advancing their own career, picking up the odd bank directorship or getting on this or that quango.

Recently a contributor to this site, on VB, said he couldn’t speak out about the housing bubble because of the abuse he would get. This same person was on Morning Ireland the very next day denouncing the Tobin Tax in no uncertain terms.

If I abuse him now on this forum ill he shut up about the Tobin Tax, like he did about the housing bubble? I would if I thought it would work, but it wouldn’t , would it? What our mutual friend meant, it goes wiuthout saying, is that he shut up because powerful agents of the Ruling Class , like Bertie Ahern , would abuse him , people who matter. Abuse from the majority of working stiffs doesn’t matter, only from intellectual giants like our former Taoiseach.

@Seafoid,

Your earlier point about cycles is relevant. The austerity v stimulus debate that Keynes won (and Roosevely kind of won) and that led to demand management and the broadly social democratic settlement after the war lwhich asted for the best part of 30 years. But it constained and germinated the seeds of its own future eclipse and the Neocon reaction that eventually overwhelmed it. That, too, has run its course and we are witnessing the search for a new settlement, but, at the same time, we seem to have reeled back to a version of the austerity v stimulus debate.

Time for a new record.

@ Paul Hunt

I think this is a supercycle inflection point. Like the breakdown of the 30s.

Oh and @Tim O’Halloran, Economics != macroeconomics.

Particularly if you’re going to start calling a subject ‘meaningless PR for the Ruling Elite’ and ‘catastrophically blind’, it’s worth knowing at least in general terms what the subject is and isn’t about.

You might find that the attitude of the vast bulk of economists is very different to what you might expect. For example, when one economist at Oxford said to me, “all fields in economics are really just branches of game theory”, I said “what about macroeconomics?” His reply: “Oh, that’s just a branch of literature.”

@Disgruntled Observer

Nice to see Steve Keen’s Debunking Economics mentioned here.

For those with a hard mathematical science background his inclusion of complex systems theory would have seemed to be an obvious avenue for economists. Sadly not – instead from the vast majority we get faith-based models with fake static equilbria. Neo-classical economists act not so much as PR men for the banks but more as high priests who provide theological support for a politics that favours a small rich elite.

For those who don’t want to read the book his recent lecture at Oxford available on Youtube is well worth and hour or so of your time.

I was (somewhat) heartened to read beyond the first predictable responses on this thread.

I appreciate that the students are engaging in a well-structured and honourable protest, but I think they’re completely lacking in any real grounds of complaint.

One of their complaints is that they learn about Smith before Keynes. You cannot possibly understand a Keynesian IS-LM-type model without understanding supply and demand in a market model, and Adam Smith is (somewhat incorrectly) attributed as the founder of market analysis. If using markets as the basis of your analysis is inherently biased, then Keynes is inherently biased. Maybe he was, and we can talk about centrally planned economies instead of market-based ones, but that’s not their complaint.

Another of their complaints is that journal articles are not cited. As Ronan L said, they’re trying to run before they can walk. For example, two papers published in the latest American Economic Review were by people from my department. Unless Econ 101 students have inherently appreciate the notion of equilibrium in a non-cooperative game, or manage to grasp how difference-in-differences econometric technique can be used to correctly identify parameters without having been taught what a difference-in-difference equation is, they’re not going to understand these two papers. These papers are about how social norms can affect behaviour and how government policy can leader to cleaner air – both important topics, I trust people will agree. But if Mankiw started lecturing on these topics, there’d be a greater walk-out rate than under his current regime.

There is also an implicit complaint that Econ 101 is biased against environmental science. I’m taking this to mean that they complain that the neoclassical framework/free markets/whatever they wish to call it will lead to further destruction of the planet. On the contrary, (almost?) every Econ 101 class asserts that markets will over-produce pollution and that this is an example of where government has a completely justified role in intervening. Quite literally, global warming is the textbook example of markets being inefficient. It’s no surprise then that Mankiw is a firm supporter of a tax on carbon, and regularly updates his blog with prominent politicians who have joined “The Pigou Club” of those in favour of carbon taxes.

So although I say fair play to the students for being active and so on, there is a hint of self-important zeitgeist bullshit going on here. I have seen Occupy Wall Street people holding placards calling for higher corporation taxes to tackle inequality. Surely these people accept that studying the effect of corporation taxes on inequality, and seeing if higher corporation taxes actually lower inequality, is worth investigating. (Since corporations aren’t owned exclusively by rich people, and because corporations can e.g. avoid corporation taxes by diverting their profits towards higher wages to directors, this is not a trivial problem.) This, of course, is something that economists do investigate. It should come as no surprise that there is a book called “Tax Progressivity and Income Inequality.” I encourage Mankiw’s students to read it, rather than protest against its existence. Rather amusingly, the Occupy Wall Street 1% statistic originates from a paper written by Emmanuel Saez, an economist in Berkeley. Walking out of an economics lecture is completely missing the point.

@Shay B

Also, surely every one who walks out on Greg Mankiw has good a basic intuition about the causes of the current global financial crisis, which he helped to cause in his own little way?

Again Shay, with not malice meant at all I’m lumping you in with the “honourable, but don’t really know what they’re talking about” gang here. Let me save you a bit of work on the RePEc search: http://bit.ly/tHuLG1

The Allocation of Credit and Financial Collapse, Greg Mankiw, QJE, 1986.

This paper examines the allocation of credit in a market in which borrowers have greater information concerning their own riskiness than do lenders. It illustrates that (1) the allocation of credit is inefficient and at times can be improved by government intervention, and (2) small changes in the exogenous risk-free interest rate can cause large (discontinuous) changes in the allocation of credit and the efficiency of the market equilibrium. These conclusions suggests a role for government as the lender of last resort.

@ Pope Epopt

Yip, a rather enlightening read. I can’t believe the absurdities they teach in these courses.

I have an ecological bent. I see things in macro. To me, the core of my understanding, and I didn’t have to go to Econ 101 to get this, is that economics is fundamentally the study of human ecology. I have a very basic, though as Steve Keen suggests, chaotic model in my mind where credit/money moves about in the manner of a climate system. It fits very well: clouds being deposits, humidity the saving’s rate, rain being credit, the sun being oil, the soils the market, the plants and trees the companies and individuals that utilize that market, and minerals and nutrients the educational richness of the eco-system. In such a model, the availability of water determines the interest rate/inflation rate, and the depth and porosity of the soils has its direct analog in the financial markets. Wind serves as the exchange rate between areas of the overall climate system serving to exchange energy and humidity along a gradient.

Now I believe this is correct. There are too many similarities in how ecosystemic processes are modelled and real world economic events that I observe. An example of this would be succession theory where an eco-system moves backwards and forwards along an r-k scale as it develops: r being a fast growing monoculture with a high energy requirement and high water requirement, that grows fast and uniform, covers an area, has minimal adaptations/resilience, but is a prolific seeder with widespread distribution. In a “normal” functioning eco-system, this r species nurses those species further along the scale towards k. Such k species are slow growing, highly adaptive/resilient, diverse, economic with resources and frugal in reproduction with a tendency towards heavy seeds that “fall close to the tree,” i.e. an investment dependent on resource conditions. r is fast growing and dies early, k grows slow and lives long. Now where an eco-system resides on this scale is a function of two things: time and disturbance. One of the greatest disturbances is the very thing that enables the system to function, the movement of water. Floods/droughts are destabilizing and destructive.

Now, intuitively this feels correct to me. I listen to the use of language in the finance/economics sphere, and hear words such as liquidity and deposits, saturation, flows, etc. I know that on an intuitive level this is also understood by most. It’s not for no reason that people refer to modern society as a jungle. However, this is what gob-smacks me here: how could you model a jungle without including water? You can’t. And yet that’s what neo-classical economics does with the economy. It models the economy without credit/money. It’s patently absurd.

Furthermore: how could you derive a sense of how a jungle operates by studying the supply/demand curves of a single species? If you were to tell an ecologist or anyone studying the natural sciences that this was what you were going to do, you’d be laughed out of the room. It really does boggle the mind. Quite frankly, I’m just amazed that anyone manages to stay in the class, let alone engage in a days protest.

A couple of questions for the economics professors here: How many of you tell your students to read Minsky? How many courses are based on the notion of an economy in disequilibria?

Oh and @Roan L
“What’s wrong with macroeconomics is quite technical” = bull.

Are you for real? You (and other boosters of the bubble back in 2007)
thought Ireland would maintain house prices at 8 times earnings forever for no reason. You were mistaken because of some obscure problems with modeling? Thats the best you can do?

All that crap you wrote about affordability is still there on the internet.

Are you also the R. Lyons I last encountered on the New York Times? I was informing their readers that the general public here in Ireland were being lied to here by a castrated media and were still being told (about August 2010) and in general believing, Lenihan’s lie that we ‘had turned the corner’. That R. Lyons was wearing the Green Jersey – to what end I really don’t know because the game was already up, readers of the business pages on the NYT already knew, it was only the schmucks , the citizens of this country who were being kept in the dark.

Spare me the condension. I was studying Economics before it became the sad joke it is today, probably before you were born. Your introduction of gobbledegook about economic models is a purile attempt to close down legitimate debate about economics.

The truth is that economics, a crucial part of a functioning democracy has been captured by what is no more than an irrational cult. It is a matter of concern for all citizens. We need , especially in Ireland, a complete reform of economics.

In Mankiw these silly students targeted totally the wrong guy.

@Liam
Isn’t Mankiw’s textbook THE textbook at the moment?

@Liam
I would think that Mankiw is much closer to these students’ ideal than most professors of introductory courses in economics.

I agree with Enda H. I only teach advanced courses, and I hesitate to introduce students to recent papers. The majority would not understand a word.

@Richard Tol, Liam Delaney

Here’s a simple question: Is it possible for Mankiw’s carbon tax proposal to be either (i) fair or (ii) efficient.

I say (i) no and (ii) no, for the reason given in the 2nd last para above. If it’s possible for me, with negligible training in economics, to point this out with no fear of error, then why was Mankiw lending his expertise and integrity to a proposal based on neither?

How to end any economics argument in two words…..

Alan……. Greenspan.

http://www.thepropertypin.com/viewtopic.php?p=149113#p149113

@Liam
The course I took in “History of Economic Thought” was, in retrospect, one of the best ones in helping me understand economics. (I hated it at the time.) It’s a different course, though, than “Introduction to Economics”. Part of the problem here may have been expectations management, but perhaps the students were just spoiling for a fight.

@Liam Delaney

In that case, you can take my word for it: under no circumstances is it possible for Mankiw’s proposal to be fair. His proposal is based on the externalities argument, but he knows the victims of those externalities will not benefit from the revenues raised.

Mankiw isn’t responsible for setting the world to rights but he is responsible for his own professional integrity and conduct. In the NY Times piece linked to he a) uses economic arguments when opportune b) ignores economic arguments when inopportune and c) freely mixes in politics without making any distinction between where his professional judgement ends and his political opinions begin. If a doctor advised a patient like that, s/he would be struck off the medical register.

@TOH

“The truth is that economics, a crucial part of a functioning democracy has been captured by what is no more than an irrational cult. It is a matter of concern for all citizens. We need , especially in Ireland, a complete reform of economics.”

+1

I was curious to see if the students had any Austrian bent. It seems not. Pity.

Austrian = mandatory. For Liberty and Prosperity

I am afraid that this thread shows why Irish economists are becoming a joke.

Prior to this thread, Professor Brendan Walsh went to the trouble of posting the results of the latest UN Human Development Report (ranking Ireland as 7th most developed in the world and 2nd in the EU27). It contains a wealth of both economic and economic-related statistics.

To date, that thread has 10 posts. Only a handful of people made any serious contribution to it.

Following that thread, this one was opened, a nonsense thread about a row between a lecturer that no one has ever heard of and some students at one American university.

To date, this thread has received 74 posts, some of them longer than War and Peace, and sparked much heated debate about nothing at all.

It is glaringly obvious that there are far too many taxpayer-funded academic economists in Ireland, with far too much time on their hands. Their numbers should be pruned dramatically. Those that are any good can get jobs in the private sector, working for the likes of IDA, IBEC, CIF, etc etc.

Hands up all you contributors who have taken , at the minimum, a college-based, two semester course in third-level teaching, with both written and practical assignments and a final examination. Well?

If not, then please think very, very carefully about your commentaries. As I have mentioned more than a few time on this blog, teaching is a tricky enterprise. And few pepople do it well. Sure, they may be world-class experts in their subject area; but competent educators?

If I am fortunate enough to encounter an undergrad economics textbook with sets of Concept Maps, detailing and explaining the diversity and interconnectedness of the different topics – then I will know that someone has sussed out how economics should be delivered at third level. Could you, an expert in whatever, construct a Concept Map. of your subject? They are fiendishly tricky – but if you can. Then you truly ‘know’ your subject.

Its not the subject matter (of any subject) that is the problem – its the human being who patrols that space between the chalk-board and the unwashed on the bleachers. The 20:80 Rule anyone?

Brian Snr.

@JtOp

You make a good point about basic numeracy skills.

One might not always agree with your conclusions but I think everyone on this site would agree that if every Irish citizen had your ability to critically analyse figures and used that to frame their political opinions, we would have a much better democracy and country, at every level.

+1 to the Optimist!

@ all,

Considering the widespread and very real dominance of the modern neoclassical paradigm, it’s influence on policy making, its causal role in the very real rightward shift in worldwide economic policy, it’s responsibility for policies that have caused numerous financial crisis throughout the world including this one, and now the inability of it’s practitioners to look honestly at its assumptions, the debate that’s now underway is one worth having.

I’ll leave some quotes, taken directly from a parallel debate on Naked Capitalism, initiated by Steve Keen:

http://www.nakedcapitalism.com/2011/11/steve-keen-harvard-starts-its-own-paecon-against-mankiw.html#comment-513665

Here’s a few “selectively picked research papers” on IS-LM and DSGE modelling that I’d like to see you prove are wrong and should be ignored:

Hicks, J.R., (1980). ‘IS-LM: an explanation’, Journal of Post Keynesian Economics, 3 (2): 139–54:

“I accordingly conclude that the only way in which IS-LM analysis usefully survives – as anything more than a classroom gadget, to be superseded, later on, by something better – is in application to a particular kind of causal analysis, where the use of equilibrium methods, even a drastic use of equilibrium methods, is not inappropriate”

Solow, R. M. (2001). From Neoclassical Growth Theory to New Classical Macroeconomics. Advances in Macroeconomic Theory. J. H. Drèze. New York, Palgrave.

[N]ow … if you pick up an article today with the words ‘business cycle’ in the title, there is a fairly high probability that its basic theoretical orientation will be what is called ‘real business cycle theory’ and the underlying model will be … a slightly dressed up version of the neoclasssical growth model. The question I want to circle around is: how did that happen? (Solow 2001, p. 19)

Solow, R. M. (2003). Dumb and Dumber in Macroeconomics. Festschrift for Joe Stiglitz. Columbia University.

. The preferred model has a single representative consumer optimizing over infinite time with perfect foresight or rational expectations, in an environment that realizes the resulting plans more or less flawlessly through perfectly competitive forward-looking markets for goods and labor, and perfectly flexible prices and wages.
How could anyone expect a sensible short-to-medium-run macroeconomics to come out of that set-up? My impression is that this approach (which seems now to be the mainstream, and certainly dominates the journals, if not the workaday world of macroeconomics) has had no empirical success; but that is not the point here. I start from the presumption that we want macroeconomics to account for the occasional aggregative pathologies that beset modern capitalist economies, like recessions, intervals of stagnation, inflation, “stagflation,” not to mention negative pathologies like unusually good times. A model that rules out pathologies by definition is unlikely to help. (Solow 2003, p. 1)

Solow, R. M. (2007). “The last 50 years in growth theory and the next 10.” Oxford Review of Economic Policy 23(1): 3–14.

the main argument for this modeling strategy has been a more aesthetic one: its virtue is said to be that it is compatible with general equilibrium theory, and thus it is superior to ad hoc descriptive models that are not related to ‘deep’ structural parameters. The preferred nickname for this class of models is ‘DSGE’ (dynamic stochastic general equilibrium). I think that this argument is fundamentally misconceived… The cover story about ‘microfoundations’ can in no way justify recourse to the narrow representative-agent construct…

The nature of the sleight-of-hand involved here can be made plain by an analogy. I tell you that I eat nothing but cabbage. You ask me why, and I reply portentously: I am a vegetarian! But vegetarianism is reason for a meatless diet; it cannot justify my extreme and unappetizing choice. Even in growth theory (let alone in short-run macroeconomics), reasonable ‘microfoundations’ do not demand implausibility; indeed, they should exclude implausibility. (Solow 2007, p. 8)

@jto

Basic maths will help you work out what has happened.

The guy you haven’t heard of wrote the most popular undergrad economics textbook and is supposed to be educating some of the worlds brightest and best networked students in ideas and waffly models that make them think they know how to work out what might happen in the future.

Some waffly models, and ideologies frankly, have been over-taught, while others have been ignored. There is strong evidence this has contributed significantly to the global economic chaos.

It isn’t trivial.

Were you kidding, or had you really never heard of Mankiw?

@Tim O’Halloran on why Economists really need to cut Greg Mankiw less slack.

It’s like talking to cultists, it really is.

It is funny you should say that Tim because I spent some of last night trying to come up with a difficult to misunderstand (that turn of phrase is important) way of demonstrating the difference in perception of the utility of modern economics from within the discipline and the rest of the world.

I think that the simplest way to do this is with word substitution.

Let us go back and imagine that instead of asking “Can we analyse the role that prominent economists played in the economic crisis?” we asked “Can we analyse the role that prominent religious figures played in the economic crisis?”.

Debate is joined with assorted ministers, priests and a Buddhist monk (who remains silent). One seminarian genially tells me that I really do not the basic understanding of religious teaching required to grasp the question, another remarks that some free market Southern Baptists I took issue with wrote the introduction to basic theology. The general feeling is that is that without an understanding of papal infallability how can I expect to understand the subject?

Of course we are not really concerned about theology, we are concerned instead with the effects of religion, and particularly whether the things it is used to justify have been a help or a hindrance to the common good in the lead up to and during the current global financial crisis.

Which brings us back to Greg Mankiw and his place on the list of most cited economists.

It might help economists to think about the walkout on Greg Mankiw if they looked at the case of John Yoo, the US attorney who wrote the memo justifying torture for the Bush administration and yet is now allowed to teach law at Berkeley. Why are people annoyed at that – he is a fine legal mind after all? Can you see any similarities in concerns about what a John Yoo tutored student might feel about the roll of the law in society with concern about what exactly Prof Mankiw is teaching along with The Wealth of Nations?

John Quiggin “Zombie Economics” worth a read for people interested in critiques of rational expectations, DGSE etc.,

http://press.princeton.edu/titles/9270.html

If anyone wants to do some online tutorials based on Mankiw’s Principles, his former TA has a full set available on youtube!

http://www.youtube.com/user/jodiecongirl

@Brendan Quinn

“If they stayed in the class maybe they would learn how Keynesism bankrupts countries and Adam Smith increases real wealth of a country.”

As the most Thatcherised country in the world, we should be solvent then, and yet, strangely, we are bankrupt. You people are imprevious to evidence.

I suppose none of you read what Mankiw wrote for NYT regarding the expiration of the tax break for the rich. It was one of the direst and most revolting things written by an econ professor that I had ever read, and I couldn’t think of any worse case of mal-employing the basic “incentive” argument in economics to justify a policy.

Those who are defending him, without knowing what kind of stuff he has been saying in the public sphere, should wake up. It’s easy to criticize 18-19 year old kids for their lack of finesse, but Gregory Mankiw utterly had it coming.

FYI: Thursday, November 3, 2011 h/t Naked Capitalism

Steve Keen:

Harvard Starts its Own PAECON Against Mankiw

http://www.nakedcapitalism.com/2011/11/steve-keen-harvard-starts-its-own-paecon-against-mankiw.html

@Liam Delaney

The point isn’t his ideology, it’s the hackwork he lends his name to in politics and in the papers. I’m amazed anyone could miss this distinction I’ve tried several times to make.

The first article I linked to on climate change is technically unsound in basic ways; Mankiw sacrifices simple accuracy to advance a political point. The second, on the Bush tax cut, is a disgrace. It’s a bizarre and innumerate abuse of reason.

Remember that Milton Friedman was driven to burst out that “spending means taxing!” at GW Bush during a reception for his 90th birthday at the White House. Bush didn’t just raise spending on military adventures, he also engaged in a big expansion of state pension schemes, the elderly being a Republican base, and of course drastically reduced taxes on the wealthiest Americans. His was the most fiscally irresponsible administration in living memory, and while Mankiw served him he was also having people drugged, abducted and literally disappeared, handing people over to be tortured by Gaddafi, Assad and others, etc. etc.

That the attacks on the protesting students have been laden with strawman argumentation tells its own tale. Nobody said he shouldn’t be allowed to teach, nor did they advocate that Marxism be included in the course as the Harvard Crimson dishonestly claimed.

There are plenty of right wingers I would treat seriously. For example long before Warren Buffet started calling for tax rises on the very rich, I’d him marked down as someone who didn’t dissemble. Likewise, Niall Ferguson goes out of his way to irritate, with some success, but when it comes down to it always tries to present a serious analysis.

By contrast, as soon as I’ve read something like Mankiw on the Bush tax cut I know never to read another word that person has written. Why bother, when every claim must be sourced and every word carefully parsed for propaganda?

@Liam Delaney

I doubt anyone is arguing for disbarring him from teaching econ. I suppose that the students should have phrased it differently, but I think you are sort of putting your words into their mouth. The problems is that Ec 10 is a pre-requisite for virtually all the advanced economic classes, and it’s practically impossible to opt out of it if you want to pursue a field even remotely related to econ. So the students simply have no choice, although an alternative equivalent class is offered every other year or so (which wasn’t offered this year). I know how it is, because I’m a Harvard graduate. The grade you get in Ec 10 is terribly important as well.

And you are naive if you think his basic world view wouldn’t affect the way he teaches the “basic stuff”. I can guarantee you it does, and it has judging by what I heard from other students, and I regard this protest as nothing more or less than the students’ refusal to have anything to do with Prof. Marnkiw. They certainly tried too hard to “sound like adults” in describing the situation in the letter, to obscure their thoroughly political “I just don’t like you” agenda, but like I said, it’s hard to fault them for expressing their dissatisfaction with the way the entire econ course structure is set up.

By agree, I mean I think its fair for students to want a choice between a principles course like Mankiw’s and, for want of better phrase, INET-type course.

I dont know anything about whether the students like him or not.

Raising this as a genuine question not as a debating point but if a group of libertarian students walked out of a lecture of a high-profile scholar teaching an intro course because he/she had been associated with left-wing groups or had written an article aggresively pushing tax increases for the rich how would people respond?

If I take Adrian at what he said above, he would say this would only be justified if it could be shown that the lecturer had used sloppy intellectual standards in making their case. So that, its not the ideology per se but the use of evidence in public debate?

@Liam Delaney

It is not Mankiw’s opinions that are at issue. It is his competence. His opinions have been proven to be wrong, 100% wrong, unless you think this current Great Recseeion\Depression is somehow possibly a good thing. That may be the view from Goldman Sachs or madder reaches of the Republican Party but to everyone normal person the wrongness of Bush’s economic policy is an establised scientific fact.

Mankiw’s continuance with his discredited philosohpy is akin to Creationists seeking scientific respect for their stuopid ideas.

In other news the Occupy movement disintegrates into an animal farm

http://hotair.com/archives/2011/11/06/inside-the-orwellian-machinations-in-occupy-wall-street/