I do enjoy Mankiw. I thought HN would appreciate the Cochrane article the most because IMO it was the best critique and because it resonates with PG's How To Disagree http://www.paulgraham.com/disagree.html
(For some reason, I had no reply button on lil_cain's comment).
Cochrane even notes that Krugman's actual econ work was brilliant. I'm old enough to remember when Krugman was young, working out the interactions of game theory and increasing returns in international trade for which he won the Nobel Prize...He once wrote eloquently about how only math keeps your ideas straight in economics." I would agree with lil_cain -- Krugman's econ work was brilliant -- while point out that Cochrane's critique was largely that Krugman is no longer practicing economics.
This is not the case. Your assumption is invalid.
Look at it this way: if economists could predict the markets, economists would all be filthy rich.
Markets are inherently chaotic. That's why they work.
One concrete example, when the fed raises or lowers interests rates it's based on a prediction of where they believe the market is going, where they believe it's at, and a prediction of the effect of the rate change. Otherwise what is the profession doing?
The Fed makes forecasts but monetary policy is based on consensus among various schools of thought, not models. It doesn't work like NOAA.
If you could reliably predict the markets you'd make a fortune -- and the markets would adjust and become unpredictable again. This is a basic feature of markets, agreed to by all comers, last I checked.
IANAE, but I'm hearing over and over again that Krugman is making political points, not economic ones. That's fine, but it makes it difficult for laymen like myself to determine if we're having a political discussion or an economic one.
Second, if you read the article in question he specifically talks about this particular school of economists using rigorous mathematical models, and the problems he has with those models (in laymans terms). Did you miss that part or did you not read the article in question?