Category: Commentary, Critique, and Response

http://crookedtimber.org/2013/08/18/krugman-keynes-kalecki-konczal1/comment-page-1/#comment-478854Anonymous insight:

“I’m here to bat for the economics discipline. Although John Q is clearly a card-carrying member, I doubt he’d dispute that he is far in the tail of the distribution of economists’ opinions. I don’t attribute this to anything underhanded on his part, but rather to reasonable disagreement. (I hope he’ll extend the same courtesy to me.)

Endorsement of Kalecki’s argument (which he got via Konczal) that “hatred for Keynesian economics has less to do with the notion that unemployment isn’t a proper subject of policy than about the notion of shifting power over the economy’s destiny away from big business and toward elected officials.”

The “hatred” with Keynesianism among economists I know isn’t anything to do with political bias. Consider the simple multiplier idea, that people spend some fraction (the marginal propensity to consume, MPC, e.g. 0.8) of their income each year. Taken literally, this implies that lottery winners will spend 80% of their winnings within the next 12 months. On a more general (and relevant) note, the Keynesian approach does match the empirical evidence on consumption patterns at all. Friedman’s Permanent Income Hypothesis is far more in line with the data, albeit that the perfectly rational expectations idea is clearly much too strong. So you try and mix the two, and you get something like New Keynesian or behavioral macro. That’s where 90% of macro has gone for the past twenty years. There is no hatred of Keynes, and no politics in that.

Abandonment of the idea that the economics profession is engaged in honest intellectual debate, in favor of the conclusion that the rightwing of the profession, including leading economists, is characterized by denialism and bad faith.

Krugman’s portrayal of the economics profession as malevolent political hacks (be it claiming that the move from Keynesianism was politically motivated, or the outrageous suggestion that Reinhart and Rogoff actively behaved dishonestly with their data) is the clearest example of bad faith that I can see.”