Paul Krugman: How I work
princeton.edu
princeton.edu
That said, his way of working also seems to be very "hackerish", i.e. instead of using "the normal ways", he hacks a model together that show some properties that the conventional and more complex models have a hard time showing. This is basically also how great hackers work, e.g. Paul Graham's Arc (it's very unconventional and simplified - but great at showing the essence of the hacker's ideas).
Anyway, great link!
be silly. do something completely different. the normal ideas that techcrunch spits out day after day are played out, do something revolutionary.
I don't get it - how helpful are "metaphors for things we think happen in the real world" if they aren't based in reality? Is that not like saying "let x be an odd number divisible by 2 [...] hence, taxes should go up!". Or am I misunderstanding the relationship between "proof" and "modeling".
Here's how it looks to me: economists believed that people are utility optimizers, and form a lot of conclusions based on the idea. When it is found untrue, economists modify what their theory is explaining (they say it's explaining "market psychology" or some nonsense) so that their conclusions still hold. It's not so obvious when the complicated workings of academics and their institutions behave this day, but if a single individual ever behaved like this, it would just seem stubborn.
Metaphors -- in this context I'd call them "rules of thumb" -- are computable by humans in real time. Reality generally isn't.
Technically, things don't fall down. When I hold a brick above your head and then let go, you shouldn't just assume that you have to dodge. You should take note of all the massive objects in the vicinity and do a calculation using the law of gravitation. You might also do some energetic calculations to make sure that the brick won't just bounce harmlessly off of your head, or come to rest on it like a falling feather.
Or, you know, you can avoid thinking at all and just allow the circuits in your brain and spinal cord to get you out of the way fast so that you can live to argue another day. Those circuits embody a relatively crude theory of physics, and their design process didn't make use of a theory of physics at all, but they work to keep you alive.
What Krugman is saying is that, while economists would love to develop the economic equivalent of the law of gravitation (and some are even foolish enough to believe that they have) their first priority is to develop some rules of thumb that can tell us when to dodge, when to stand still, and when to wear a hard hat. And that can be used to explain, in simple terms, where the bump on our head came from. ("You stood under a metaphorical brick and failed to dodge in the Keynesian manner.")
Your reflex/calculation analogy makes me wonder if new neural network designs ought to be tested against economic data...
* Joe can make 10 A widgets in an hour, and 5 B widgets in an hour.
* Bob can make 5 A widgets in an hour, and 4 B widgets in an hour.
Joe and Bob need 10 A widgets and 10 B widgets each day to live. They are both lazy, and don't want to work more than they have to.
This is obviously a totally contrived model of an economy. Yet, you can work out that if Bob and Joe negotiate, each only pursing his own self-interest, they will eventually decide that Joe should concentrate on making A's while Bob should concentrate on making B's. Bob and Joe both wind up better off than they would be alone, even though Joe is better at everything than Bob! (Work out the math yourself, it's fun.) Thus, the silly assumptions teach us something very serious about trade and comparative advantage.
this is a style that not enough folks actually focus on explicitly, at least from my range of experience
High effort/low reward: not an attractive proposition. It doesn't attract many folks.
You need a way to demonstrate that it wasn't obvious; and (I think) you need to be a for-the-love-of-it kind of a guy: the unreasonable man upon which all progress depends.
http://article.nationalreview.com/?q=NmZmMzlmZjU4NDVlMmFlZWR...
This argument has a contrary opinion to those expressed in this thread.
Burn the witch!
I wonder if I could make money selling pre-lit virtual torches for the angry mob that is about to descend upon you?
Seriously -- I'd like to see this discussed in a separate article. Very interesting stuff.
The case against Krugman from those niches of the far right is almost entirely political. That link is a good example of the genre.
This is better and back when NR had something worthwhile to say:
http://article.nationalreview.com/?q=NmQ4MzY0NGVjODdmZmY2ZGQ...
I don't mind you characterization of the site as far right wing. I'd simply look at the facts, source if doubtful, and continue the discussion from there. Same as if it were far left wing.
The issue is that he, and the economics establishment led by Helicopter Ben, never met a rate cut they did not like. Cheap money and credit are the fix for every problem. Today many recognize Greenspan held rates too low for too long. At the time, Krugman opposed rate increases from those low levels. He and his ilk fail to see any connection between destructive booms and the cheap credit they promote.
In fall of 2004, as Greenspan started raising interest rates in baby steps (very belatedly - housing was already bubbling up), Krugman was very opposed to those rate hikes. His analogy for the tech-telecom bust was with the post-bubble doldrums in Japan - and it was no time to be risking a slide back by rising rates.
In the event, directly as a result of that easy credit policy, we got the mother of all bubbles in housing, which has almost taken the entire financial system down with it. Krugman did not anticipate the bigger bubble that was brewing even as he was advocating continuing 1% interest rates (well below the rate of inflation even then!).
Economists like Nouriel Roubini, Steven Roach (then Chief Economist at Morgan Stanley), eminent people like Paul Volcker (Fed Chairman between 79-87), investors like Warren Buffet & Marc Faber all warned about the 2004-7 bubble in housing several times, for many years. Krugman had a very public voice during that entire time, but saw no problems with the Greenspan/Bernanke Fed.
It is worth remembering this real world record, as the world fetes his Nobel prize.
http://query.nytimes.com/gst/fullpage.html?res=9F05E6DD1E3BF... "A number of analysts have accused Mr. Greenspan of fostering a debt bubble in recent years, just as they accuse him of feeding the stock bubble during the 1990's. Just two months ago, Mr. Greenspan went out of his way to emphasize the financial benefits of adjustable-rate, as opposed to fixed-rate, mortgages. Let's hope that not too many families regarded that as useful advice."
One reason why he might have argued for lower interest rates, is that the employment growth during the "Bush Boom" was so dismal compared to earlier expansionary periods. (See: http://krugman.blogs.nytimes.com/2008/08/26/about-that-bush-...)
This seems like a big statement. What is the point of models, if they aren't true? Metaphor is important in political rhetoric, but not necessarily in science...
Because they can make testable predictions or approximations for the truth. This is not unique to Economics, even the "hard" sciences have to deal with this problem. Before relativity was conceptualized, Newton's models for gravity and inertia were considered "good enough" even though they were observed to break down at the cosmic observational level. Even today, many measurements have to account for uncertainty in unit size (even at the macro scale!) and have to be accounted for when crunching numbers in serial calculations. (Wikipedia's got several acceptable pages on several types of uncertainty, especially measurement uncertainty.)
http://www.realclearmarkets.com/articles/2008/10/krugman_and...
He would not have been awarded the prize if his work wasn't important regardless of his politics.
Sorry, I'm not giving up being able to make a simple observation the group may disagree with. I'm sick of the herd mentality, and you guys can vote me into the gutter and it's not going to stop me.
I could care less about Krugman.
Even then, the author ends with:
"But these days, even while disavowing overtly protectionist positions, Krugman's columns do sometimes have a protectionist tenor. Not only purists, but developing country policymakers, worry that Krugman is part of the shifting intellectual climate in the United States that has become ambivalent about keeping markets for goods and services open. Now that he also has the imprimatur of the Nobel Committee, Paul Krugman has a special responsibility to retain his cosmopolitan and internationalist credentials. At this time of financial crisis, Krugman should be reminding us that shutting down markets for trade helped transform the depression of the 1930s into the Great Depression."
I'm open to discourse, just not impressed with the downmodding as a result of going against the herd over here. I've found economics a subject of some interest, but even with as much math as it takes, my _opinion_ is that it is far from a hard science like physics. So pointing out that politics and people's biases are involved shouldn't be such a freaking big deal, in my opinion. And that goes with Hayek, Friedman, and Krugman. My comment holds for all of them. That's the weird part about it.
That sort of thing pretty much invariably happens with economics or politics on sites like this, whatever persuasion the 'herd' happens to be.
Which is why I think discussion of said topics should be ruthlessly hunted down and driven away.
So I was hunting the articles down and driving them away. The problem is that it didn't look like that for the majority.
If you don't want to see dissent and downmod it, then how can minority opinions ever sway the majority that they are wrong? Sure, in this case I'm probably smoking crack, but there's something really bad here.
In this particular case it's clear that you did not RTFA since it's about Krugman's workflow, and says relatively little about the substance of his work and almost nothing about his politics other than that he regularly attempts to think and write about topical policy debates.
It looks rather as though you read the the name Krugman and reacted unthinkingly with an attack. That is not dissent, that is noise. If you want to make noise may I suggest that the politics reddit is the right place for you and that Hacker News is for people who want to focus on the ideas rather than the emotions.
Nicely done -- especially liked the part about emoting. The neat thing is that it makes it impossible to reply in any fashion whatsoever. Which of course was the point.
Starting highly charged political threads on topics that are only tangentially related to the linked article does not contribute value to the discussion.
I've noticed for myself that one of the signs that I am spending too much time in front of a computer is that I get into emotional arguments on internet message boards or IRC. It's easy to forget that a level of emotional involvement that would be normal and healthy IRL can make you seem like a raving lunatic online.
Take that as you will. I am through with this thread.
PLONK
and tell me again that he isn't a quack.
Are you saying that Krugman was a spy who actually published and worked his way up the right side of the political spectrum in order to make a stand for his true left-leaning views? Or the other way around?
I found the "Pundits as Moles" post murky. I'm not so sure it helps in overcoming bias as much as finding excuses for behavior we don't like. Pundits could be moles, they could just sway with the partisan wind. Or they could just be businesspeople looking at their daily ratings. A plug-and-play system for determining motivations is not something that will help you overcome bias.
I'm not reading into that "Pundits as Moles" post overly much -- I just thought it funny that it seemed to apply to Paul Krugman.
Krugman is a liberal economist. I am guessing that you are more in favor conservative economics. I believe that both conservative and liberal economics work perfectly well. It's a matter of convincing the people participating in the financial system that the theory in place or the one to be adapted is the best one. It all comes down to faith. If you have enough faith, liberal economics probably works better. Conservative economics doesn't require nearly enough faith to work.
Term hijacking alert.
http://en.wikipedia.org/wiki/Economic_liberalism
I guess you mean Keynesian.
If we can agree on that, certainly you can see that the door is open for the members of the committee to be swayed by lots of things, including his political work/views. To act otherwise is to try to turn respected scientists into some sort of mechanistic non-humans. People are influenced by all sorts of things, at the conscious and unconscious levels.
I have no idea what part of my statement is controversial. Yet it seems to just drive some people nuts.
For what it's worth, though, the committee members are selected by Norwegian/Swedish institutions, which are perhaps less likely to be swayed by political actions in the U.S.