“Not even wrong” is not praise

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.””

That’s right, Williamson not only defends the EMH on the basis that it’s not even wrong, but follows up by making the same claim about the whole of modern macro. Those are, quite literally, his only criticisms of these chapters. His commenters (none of whom seem particularly favorably inclined towards me) try to suggest that isn’t the most effective line of attack, but he comprehensively misses the point.

Williamson’s comments on my other chapters aren’t much better. He doesn’t present a single piece of empirical evidence. Responding to my chapter on Trickle Down, his only argument is

On some level, it seems obvious that economic growth benefits all residents of a country. Whatever my skill set, I would rather ply my trade in the United States than in Malawi.

Honestly, my lamest blog commenters can do better than that, and the smae is true his snarky comments on the privatisation chapter.

Williamson does have a good line in personal condescension. St Louis is about as close to the geographical centre of the economics profession as you can get, while Brisbane is about as far away as it gets. So it’s time for a bit of provincial-bashing

What is Quiggin’s claim to fame? His early work is an odd mix of agricultural economics and decision theory, but he seems to have distinguished himself mainly in public policy. He writes regularly in the mainstream media, writes a blog, and Zombie Economics appears to have sold well. Now, what is Quiggin up to in Zombie Economics? Roughly, Quiggin is the Australian farm team in the Krugman/Thoma/DeLong league.

Pursuing the baseball metaphor, I’m reminded of Casey at the Bat, except that, after the defiant eye-gleam and lip-curling sneer, and the bottom-of-the-ninth strike-out, our Casey heads off for a run around the bases in the manner of a home-run hitter.

30 thoughts on ““Not even wrong” is not praise

  1. I see – the fabled ‘Efficient Markets Hypothesis’. And I thought it was ‘Exhibiting Maximum Hyperbole’ and was the News Corpse de facto motto, and the secret password to the Kippax Street executive geezer….BSDs only.

  2. @Mr MIT

    I have commented on Stephen Williamson’s critique of John Quiggin’s treatment of the efficient market hypothesis. I have done so not as a ‘follower’ of John Quiggin but on the basis of my own research.

    My own research was assessed by three established authors in mathematical economics from three countries. One of them was the editor of the Journal of Economic Theory.

    Whether you like it or not, in his review of Prof Quiggin’s book, as publicised on Williamson’s blog site, Stephen Williamson shows a remarkable and disappointing lack of depth in methodological questions.

    To the best of my knowledge, Prof Quiggin is not fond of cheer crowds.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s