I forgot to add: the abstraction and unreality of much of economics and econometrics makes a lot of economic research totally useless to the wealthy vested interests which Madrick refers to. But I guess they see that as the cost of having so much political support from economists.
Jeff Madrick writes: >>... the exceptions [to the Econ. profession's smug consensus] were partial >>at best, and they [Shiller, Roubini, Baker, etc.] prove the rule. What most >>economists can't seem to acknowledge is that they have been overcome by free >>market ideology over the past thirty years. Such ideology is especially >>beneficial to wealthy vested interests. But economists are purportedly >>dedicated to objective empirical and statistical analysis. Ideology has >>little part in the work of these serious empiricists, but surely there was no >>buttering up of the rich and powerful that provide jobs and grants.< I wrote: > There is a significant percentage of economists who are not dedicated > to "objective empirical and statistical analysis." Instead, they build > abstract models of an idealized world, sandcastles in the air. More > generally, instead of valuing knowledge or wisdom, the profession > values and rewards mathematical technique, including those of > statistics. > > And even those committed to "objective empirical and statistical > analysis" most often use statistical models that assume merely > Gaussian randomness, with no Keynesian uncertainty and no Mandelbrot, > while believing that the future world is simply a continuation of the > observed world of the past. The classic result of this kind of > thinking is the case of LTCM,[*] which failed in 1998 (led by a raft > of "smart" economists, including two who won "Nobels"); its disaster > was repeated on the gargantuan scale 10 years later. > > [*] This was a modern version of the Holy Roman Empire, which was > neither holy, nor Roman, nor an empire. It wasn't long-term in its > perspective, it didn't deal with capital (long-term instruments), and > didn't really manage as much as arbitrage. It also wasn't a hedge fund > but rather a speculative fund that made its relatively high profits > via leveraging. > -- > Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own > way and let people talk.) -- Karl, paraphrasing Dante. > -- Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own way and let people talk.) -- Karl, paraphrasing Dante. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
