I’ll be talking on this topic at a hastily-organized workshop at ANU tomorrow. Details here
In my book, Zombie Economics, I started the account of macroeconomics with the observation
Macroeconomics began with Keynes. Before Keynes wrote The General Theory of Employment, Interest, and Money, economic theory consisted almost entirely of what is now called microeconomics. The difference between the two is commonly put by saying that microeconomics is concerned with individual markets and macroeconomics with the economy as a whole, but that formulation implicitly assumes a view of the world that is at least partly Keynesian.
Long before Keynes, neoclassical economists had both a theory of how prices are determined in individual markets so as to match supply and demand (“partial equilibrium theory”) and a theory of how all the prices in the economy are jointly determined to produce a “general equilibrium” in which there are no unsold goods or unemployed workers.
I went on to observe how the pre-Keynesian approach had been revived by the “New Classical” school, and how the apparent convergence with “New Keynesian” economics had been shown to be illusory after the failure of Dynamic Stochastic General Equilibrium models to deal with the 2008 financial crisis and the subsquent, still continuing, depression.
With all of this, though, I still never thought of academic macro, in either saltwater or freshwater form, as being a simple reversion to the pre-Keynesian notion of general equilibrium, with no concern about aggregate demand or unemployment, even in the short run. It turns out that, at least for a large segment of the profession, this is quite wrong. I’ve just received a book entitled Big ideas in Macroeconomics: A nontechnical view by Kartik Athreya, an economist at the Richmond Federal Reserve who made a splash a few years back with a piece entitled Economics is Hard. Don’t Let Bloggers Tell You Otherwise, which, unsurprisingly, did not endear him to bloggers. As a critic of mainstream macro, I’m briefly mentioned, and I just got a review copy.
The new book is an attempt to simplify things, and indeed it has proved enlightening to me and also to Herb Gintis who contributes a blurb on the back, commending it as an accessible and accurate description of the dominant way of thinking about macroeconomics.
The easiest way to see why the book is so striking is to list some topics that do not appear in the index (and are not discussed, or only mentioned in passing, in the text). These include: unemployment, inflation, recession, depression, business cycle, Phillips curve, NAIRU, Taylor Rule, money, monetary policy and fiscal policy.
Reader “Nicholas Bourbaki” has sent me a link to an animation illustrating some of the ideas in Zombie Economics (with actual zombie, naturally). It’s done using the Xtranormal movie maker all the cool kids are using these days. Watch and enjoy.
fn1. Apologies to Nicholas if Mr and Mrs Bourbaki were big fans of 20th century modern mathematics or 19th century French demagoguery and really did name their baby in this way.
The Australian edition of Zombie Economics, updated and with an additional chapter on Economic Rationalism, is about to go on sale. I’ll be appearing at a launch event at Gleebooks in Sydney on Wednesday (9 May) talking with Jessica Irvine of the SMH.
The launch coincides with the US publication of a paperback edition, with a new chapter on Austerity. The Italian translation also came out recently, and there are versions coming in French, Greek, Portuguese, Korean and Simplified Chinese. Collect them all!
I’ve just finished revising Zombie Economics for an Australian edition, to be published by Black Inc in May, with an all-new chapter on economic rationalism, the Australia form of Zombie econ. Keep a lookout!
At one point in Zombie Economics, I tried a Popperian (or maybe Paulian) smackdown, saying that some defenders of EMH used arguments that effectively rendered it unfalsifiable. I thought that was a bad thing, but apparently at least one reviewer disagrees. Following my stoush with Murdoch, a commenter pointed me to this piece by Stephen Williamson of Washington University at St Louis, who has apparently been asked to review the book for the Journal of Economic Literature. Williamson claims that I am badly confused about the EMH, and that
Market efficiency is simply an assumption of rationality. As such it has no implications. If it has no implications, it can’t be wrong.
He follows up with “Like the “efficient markets hypothesis,” DSGE has no implications, and therefore can’t be wrong.”"
Ian Masters, who’s the US representative of the well-known Australian clan (Chris, Roy, Sue and Olga are all prominent figures here) has interviewed me for this radio program Background Briefing, broadcast and podcast on KPFK-LM, in LA, about my book Zombie Economics. Interview should go to air about noon Sunday Pacific time, and the podcast will be available almost immediately, and also, a bit later at Ian’s own site.
I got an email the other day, trying to set up an interview about Zombie Economics: How Dead Ideas Still Walk Among Us. Shortly afterwards there was a cancellation – they actually wanted the author of Zombie Economics: A Guide to Personal Finance, due to be released in May.
I’m well aware that there’s no copyright in book titles (Zombie Econ was originally going to be called “Dead Ideas from New Economists, and back in the 90s I wrote one which the publisher insisted on calling Great Expectations), but I can’t help wondering about the implications for sales. At least for the moment they don’t look too bad. According to Amazon, 12 per cent of people who viewed the doppelganger ultimately bought my book, while the proportion going the other way is zero (although some zombie fans go for Chris Harman’s Zombie Capitalism). But I imagine that’s the result of bad search results among people looking for mine, rather than a spillover from those looking for the doppelganger. If so, I imagine the flow will reverse when the new one is released.
Are there other interesting examples of book title recycling, or interesting ideas for new takes on classic titles?
When I signed the contract with Princeton UP for Zombie Economics, I read the section covering movie rights, and had fun chatting about which of my friends would be best suited to play Dynamic Stochastic General Equilibrium, Trickle Down (yes, yes, I know!) and so on. Then I found out that Freakonomics actually has been made into a movie, and of course, I wanted the same. But, even in the century of the mashup, it doesn’t seem likely that a polemical economics text could be made watchable just by adding zombies (though I thought the mash worked pretty well in print).
Instead, how about starting with a comic-horror zombie movie, then making the apocalyptic zombie-generating event a financial-economic crisis? That seemed much more promising, and I starting working out the treatment in my head. All was going well until I realized that I was stealing all my best ideas from Charlie Stross. I emailed Charlie, and he said to go right ahead, so I thought at least it would be fun for a blog post.
Over the fold some of the scenes I’ve sketched so far – feel free to make suggestions which I will then feel free to steal in the unlikely event that this goes any further.
Apparently, a reader wrote in to Princeton University Press asking for a poster of the cover, which isn’t standard issue for university press books. But thanks to the Internet, all things are possible these days, and within hours, they have been made available.
Slightly anachronistically, here’s what I wrote for the LSE blog in advance of my lecture last night. The blog as a whole is well worth reading.
I’m speaking at the London School of Economics tonight, basically recapping my Zombie Economics book. It’s a bit late notice, but in case any London-based readers are interested, I thought I would give the event a plug here.
I’ve done a podcast discussion with Russ Roberts for EconTalk. There’s also a transcript of the highlights, great for people who lack the time/ to listen to a long podcast.
Although we are pretty much at opposite ends of the spectrum as conventionally viewed (Roberts is a George Mason prof and Chicago PhD and EconTalk is published at the EconLib site) we found quite a few areas of agreement, and had a constructive discussion on the points of disagreement. That’s partly because Russ is a good host, but also because, as Matt Yglesias noted in a tweet not so long ago, my critique of ideas like the EMH is very similar to that of Austrian-inclined critics like Amar Bhide. I plan to have more to say about this.
fn1. I also got a review from Arnold Kling on the same site, which began “I agree with some of it, which might be considered a rave review.”
fn2. I’ve retweeted this, but I don’t know how to hyperlink to it
Zombie Economics gets its official Halloween launch at the Irish Club, 6:30 tonight, courtesy of Birsbane Young Economists
I wasn’t quite sure whether I was presenting my own dangerous ideas, or talking about the dangerous ideas of the zombie economists, but either way it was a fun event. I’ve attached the presentation in various formats PPT and PDF (v large) formats, and a font you may need to read it.
I’ve been living with the text of Zombie Economics for a long time and the cover art came out a while back. But now I finally have my hands on a physical copy of the book, and it’s surprising what a difference the real object makes. My immediate reaction was to open it with dread, sure that some terrible error would jump out at me, but that didn’t happen (no doubt the reviewers will find them, but that’s their job).
With that out of the road, I’ve been filled with irrational confidence. “Surely”, I think, “even the most jaded traveller, passing this book on the airport bookstall, will feel impelled to buy it”. No doubt, this optimistic glow won’t survive the arrival of actual sales figures, but I’m enjoying it while it lasts.
That’s the title of Daniel Drezner’s review Zombie Economics along with several other post-crisis books. I’m glad he likes the title, but he offers what seems to me to be a rather unfair representation of my argument. As the author, I’m not exactly unbiased, so see what you think.
Although Zombie Economics isn’t due out until Halloween (end of October), you can pre-order from the Australian distributor (Footprint Books, form attached) or from the main US outlets (Powells, Borders, Amazon).
… for the first book review to come in, and happily, it’s a good one, from Buttonwood, who has long been my favorite columnist/blogger at The Economist.
Get more news as it happens on
The final proofs of Zombie Economics went off to the typesetter this morning, and you’ve all seen this evening’s news. So, I guess it’s time for me to end my hiatus, and make whatever contribution I can to the marvel of democracy. Not to keep anyone in suspense, I’ll be advocating a vote for the Greens.
I sent the manuscript of Zombie Economics off to Princeton University Press last night. There’s still plenty of work (figures, index, copyediting, some last-minute changes, galleys) to be done for a planned release at Halloween. But this is the official submission. In writing the preface I checked over the comments I’d received, here and at Crooked Timber. Several thousand in total, from more than a hundred different commenters. Thanks to everyone who took part. It was a huge help and encouragement to me.
My publisher just told me the publication date for my book has been moved forward, and the due date for the manuscript is “…well, now”. Lots needing to be done, and zero time to do it, but I’m sure I’ll manage somehow.
I’ve finally completed a near-final draft of my book, although some bits, such as the following ‘Reanimation’ section of the chapter on privatisation are still a bit rough.
I’m getting some good comments from readers here, and through more conventional academic channels, which should help me sand down the rough spots a bit. Anyway, thanks to all for the comments I’ve received. It’s made a huge difference to me, and made the production of this book a much less daunting undertaking than laboring alone.
Remember, before pointing out stuff that is missing, that an earlier draft is online here and may be worth reading to see where I’m coming from.
The deadline for the manuscript of Zombie Economics (last complete draft here) is only a few weeks away, and the zombies are popping up faster than I can knock them down. I’m adding a section on reanimated zombies to each chapter. Over the fold is the social mobility defense of trickle down economics, as animated by Thomas Sowell. There’s still time for me to benefit from your comments.
My book is due for publication in the US Fall, so work on my added sections on reanimation is starting to feel like one of those games where you have to kill all the zombies to get to the antidote before you fall victim yourself. Here’s another one – more on the way
I’m adding a little section to each of the chapters in my Zombie Economics book called “Reanimation”, about the attempts that are already under way to revive economic ideas killed (at least according to the standard rules of hypothesis refutation) by the global crisis. I wasn’t surprised to find plenty of examples for the efficient markets hypothesis (easy to render immune from any kind of refutation by an appropriate formulation) or for policy ideas that yield big benefits to the rich and powerful, such as privatisation and trickle-down economics. But I was surprised a little while ago to see the crisis described as a transitory blip in the continuing Great Moderation. Still that pales into insignificance compared to this piece by Casey Mulligan of Chicago (h/t commenter Daniel ), in which (I swear this is true!) the crisis is the result of financial markets correctly anticipating the adverse labour market impacts of possible legislation under Obama, such as a health plan that might include means tests.
A glutton for punishment, I’ve decided the Zombie Economics book manuscript I submitted a month ago (mostly online here) is in urgent need of more zombies. I’ve been struck, even in that short space of time by the extent to which, with undeniable “green shoots” now appearing, the zombie ideas I’ve written about are clawing their way through the softening soil and walking among us again. The most amazing example is that of the Great Moderation – surely you would think no one could believe in this anymore, but they do.
So, I’m planning to add a bit to each chapter, pointing to examples of these ideas being revived. I’d appreciate good examples for the rest: Trickle Down, Micro-based Macro the Efficient Markets Hypothesis and Privatisation (of course, the Queensland government gives an example v close to home).
Over the fold, the conclusion of my book, with Release Candidate title “Zombie Economics: How Dead Ideas Still Walk Among Us”. I plan a proper post on the whole bookblogging experience, but until then, I’ll thank everyone who’s commented, or just read this exercise with interest and make one (maybe) last request for help. Can anyone recommend a book on Thatcher’s economic reforms that would be a good suggestion for further reading? I’m currently suggesting Anderew Glyn’s Capitalism Unleashed, but I’d like to add something from a centrist or Thatcherite perspective, as long as it’s readable and not too objectionable for words.
I sent off the draft MS of my Zombie Economics book to the publisher last week, but there is still time for improvement. Over the fold is the second, and final part of the privatization chapter.
You can read most of the book (not always the final draft) at my wikidot site.
As always, comments and criticism much appreciated.