Author: John Quiggin

Zombies

John Quiggin18 Comments

Got this in my email this morning inviting contributions to a special issue of a journal (I won’t name it)

Dynamic stochastic general equilibrium (DSGE) models have become an established framework of reference in empirical macroeconomics. Because DSGE models combine micro- and macroeconomic theory with formal econometric modeling and inference, they are now widely used in policy analysis and academic discourse to address questions in monetary economics and business cycle research, and to inform policy interventions. The continued success of DSGE models will rest on a sustained ability to meet key challenges and improve upon the main modeling paradigm both in terms of its theoretical foundations and its econometric implementation.

And of course, we can thank DGSE models for predicting that nasty crisis in 2008 and prescribing the policy responses that fixed it so completely. Good think we didn’t have to rely on that old-fashioned Keynesian stuff.

Burying the lede

John Quiggin31 Comments

That’s US press jargon for putting the key item in a story so far down no-one will read and it certainly applies to this David Carr story about NewsCorp in the US. You have to get down to the bottom of the first page to discover that News settled, very generously, a claim in which it was accused of hacking a competitors systems. That seems to undermine the common assumption (including mine) that the specific pathology of hacking was confined to the UK.

Yet more Monckton

John Quiggin39 Comments

The House of Lords has taken ‘unprecedented’ action to stop Lord Monckton claiming that he is a member (his closest approach was receiving zero votes in an election among hereditary peers). That’s typically the opening lie in a Monckton presentation that misrepresents everything from the United Nations to the laws of arithmetic. It’s hard to imagine how many cease and desist letters would be required to stop all the falsehoods, or what would be left of his presentation if they were removed[1].

But, as I said previously, the real point here relates to the Australian political right, who have embraced Monckton with universal (if sometimes feigned) enthusiasm. And not just Monckton, but a long string of conpsiracy theorists, charlatans and cranks, who keep on repeating the same lies despite being repeatedly refuted (Ian Plimer on volcanoes can stand in for a multitude of examples).

As I said previously, it’s hard to tell who is most blameworthy here. Is it the’crazy uncles’ represented by people like Nick Minchin and encompassing the majority of conservative supporters, who actually believe this stuff, the weathervanes like Tony Abbott who will happily say 2+2 = 4,5 or 73 according to what their listeners want to hear, or supposedly serious conservatives/liberals who know it’s nonsense but keep their mouths shut.

In the short term, and aided by some spectacular own goals on the Labor side, this intellectual catastrophe hasn’t had any political costs for the right. But that won’t be true forever. And for any intelligent person of conservative inclinations, the knowledge that political activity on their preferred side requires (at a minimum) tacit acquiescence in this kind of thing must be pretty appalling.

fn1. Indeed, bearing in mind Mary McCarthy’s famous remark about Lillian Hellman, it’s hard to imagine that even prepositions and conjunctions would remain.

Don’t look at the bank behind the curtain

John Quiggin19 Comments

The political impregnability of Rupert Murdoch and NewsCorp has always been one of those facts about the world that seemed regrettable but eternal. By contrast, the ability of the banks to emerge from their near-destruction of the world economy richer and more politically powerful than ever before certainly took me by surprise when it happened (partly motivating my change in title from “Dead Ideas” to “Zombie Economics”). John Emerson pointed out the other day that the head of risk management at Lehman Brothers, arguably the most egregious individual failure among the thousands of examples, was just appointed to a senior position at the World Bank.

But now it seems there is just a chance that the curtain might be swept away from even these wizards. The emerging theme in commentary is the corrupt culture of impunity represented by the press hacking scandal, MP expenses and the banks (here’s UK Labour leader Ed Miliband pulling them all together).

If Labor could tie the Conservative-Liberal austerity package to the protection of the systemically corrupt banking system, they would have the chance to put Nu Labour behind them (I noticed Blair has already credited Brown with killing the brand). Instead of putting all the burden on the public at large, they could force those who benefited from the bubble to pay for the cleanup. The two main groups are the creditors who lent irresponsibly, counting on a bailout and should now take a long-overdue haircut and high-income earners who benefited, either directly or indirectly, from the huge inflation in financial sector income.

I know it seems hopelessly naive to think the banks could ever be brought to heel. But they were, for decades after the Depression. And as impregnable as they look today, Newscorp looked just as impregnable three weeks ago, as did the CPSU and the apartheid regime in South Africa thirty years ago.

Of course this spring moment won’t last long. But perhaps there is enough momentum that it won’t be exhausted by Murdoch alone.
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Greenpeace, an enemy of science

John Quiggin139 Comments

Tim Lambert comments on Greenpeace sabotage of a CSIRO experiment on GM crops. Sadly, Greenpeace has become an openly anti-science organisation.

I agree with everything Tim says, but I’d add something more on the politics of this action. This kind of criminal vandalism, in the “right” cause, appeals to the juvenile instincts that nearly all of us retain to some extent, but it has repeatedly proved disastrous for the left, and the environmental movement. It’s worth comparing this kind of action to civil disobedience protests, where people put themselves on the line and openly invite arrest. If these guys had any desire to promote genuine debate they would turn themselves in and defend their actions in open court.

Given the embrace of anti-science and anti-rational views by the political right, it is important that the left and the environmental movement should dissociate themselves entirely from this kind of action. It will be a long time before Greenpeace can regain my support, if they ever do.

What can you say?

John Quiggin39 Comments

I don’t usually pick on Catallaxy. But I couldn’t resist pointing to this post where Rafe Champion describes Lord Monckton as a “sophisticated commentator”, and the rest of the crew pile in to defend him against the lone commenter pointing out the obvious fact that Monckton is a charlatan, conspiracy theorist, and all around crank. Not by any means the greatest of his follies, but this is someone who claims to be a member of the House of Lords after receiving zero votes(!) in the election for hereditary peers.

Being on the political left hasn’t always been comfortable, but these days I’m really glad I stuck it out. There must be some people remaining on the political right who know how far they have sunk when someone like Monckton can be a leading advocate for their views, but they are all either saying nothing (since speaking up would be politically suicidal), or hypocritically going along with the general applause.

Awards night

John Quiggin13 Comments

We academics love nothing better than to give each other awards. The Australian Conference of Economists is being held in Canberra this week, and the big social event was the conference dinner on Monday night, where blogger-economists were (as usual) well represented when the gongs were handed out. The “Best Young Economist” award (it says something about the pace of academic life that “Young” = “under 40”) previously won by econbloggers Joshua Gans and Paul Frijters, went this time to Andrew Leigh, who left ANU last year to become MP for Fraser in the ACT. Academia’s loss will be the nation’s gain if Andrew gets to exert some influence over public policy.

I also scored, being chosen for the Distinguished Fellow Award. Looking at the list of previous recipients, it’s a big honour to join them and I’m very grateful to my colleagues in the profession, especially since I’ve argued pretty vigorously with most of them at one time or another. The economics profession has its problems (as I argued in Zombie Economics, we haven’t been too good at learning the lessons of the Global Financial Crisis), but all things considered, it has been a force for good in Australian public policy debates.