Don't get mathy with me, or I'll give you a good shunning. | E-Axes

Not a member yet? Click here.
Forgot your Password?
Archives - Categories
On Inequality
On the Eurozone Debt Crisis
On Monetary Policy and Central Banking
On Global Economic Growth
On the Greek Debt Crisis
On the Banking and Financial Sectors
On Brexit
On China
On India
On Global Inflation
On Currencies
On the US Debt
On the "Economics" of the Arab Spring
Working Papers
Books suggested by members

Don't get mathy with me, or I'll give you a good shunning.

Author(s): Stephen Williamson

From New Monetarist Economics:

I had heard Paul Romer is disgruntled, and now that he's written down his thoughts, we can perhaps sort this out. We'll start with his recent blog post on "Protecting the Norms of Science in Economics." Here is Paul's view of science:

My reading of the evidence convinces me that a group of scholars can make progress toward the truth only if they share a commitment to the norms of science, a set of norms that support a reputational equilibrium that encourages trust and that rewards progress toward truth.

Think of truth as existing at the top of a mountain. Once we get to the top of the mountain we'll know it, as we'll be able to see a long way, but while we're climbing the mountain we're in a fog, and we can't see the top of the mountain. But we might be able to discern whether we're moving up, down, or just sitting in one place. Paul thinks that we can't just let scientists run loose to take various paths up the mountain with different kinds of gear, and with different companions of their choosing. According to him, we have to organize this enterprise, and it's absolutely necessary that we write down a set of rules that we will abide by, come hell or high water. And when he says "reputational equilibrium" most economists will know what he has in mind - there will be punishments (imposed by the group) for deviating from the rules.

Paul isn't just throwing this out as a vague idea. He has a specific set of rules in mind. We'll go through them one by one:

1. We trust that what each person says is an honest account of what he or she thinks is true. So, that seems fine. We'll all agree that people are at least trying to be honest.

2. We all recognize that reasonable people can differ and that no one has privileged access to the truth. Sure, people are going to differ. Otherwise it would be no fun. But there's that word "truth" coming up again. I really don't know what truth in science is - if I ever find it the surprise will likely induce cardiac arrest, a stroke, or some such. To my mind, we only have a set of ideas, which we might classify as useful, not-so-useful, and useless. One person's useful idea may be another's useless idea. Particularly in economics, there are many of us who can't be convinced that our works of genius are actually not-so-useful or useless. Truth? Forget it.

3. We take seriously the claims of people who disagree with us. What if the people disagreeing with us are idiots?

4. We are ready to admit that others might be right that each of us might be wrong. At first I thought there was a typo in this one, but I think this is what Paul intended. Sure, sometimes two people are having a fight, and no one else gives a crap.

5. In our discussions, claims that are recognized by a clear plurality of members of the community by as being better supported by logic and evidence are the ones that are provisionally accepted as being true. This is absurd of course. We don't take polls to decide scientific merit. Indeed, revolutionary ideas - the ones that take the biggest steps toward Romerian truth - would be the ones that would fail, by this criterion. Scientists, particularly the older ones, become heavily invested in the status quo, and don't want to give it up. In casting their negative votes, they may even by convinced that they are adhering to (1)-(4).

6. In judging what constitutes a “clear plurality,” we put more weight on the views of people who have more status in the community and are recognized as having more expertise on the topic. The problem with (5) of course kicks in with a vengeance here. What community? Recognized how? What expertise relative to what topic? I get no weight because I work at the University of Saskatchewan and not Harvard, or what?

7. We update the status of a members of our community on the basis of his or her contribution to progress a clearer understanding of what is true, not on the basis of “unwavering conviction” or “loyalty to the team.” This I suppose is intended to answer my concerns from (6) about what "status" might mean. I guess our status is our ranking in the profession, according to goodness. Do a good thing, and you move up. Do a bad thing, and you move down. Who decides what's good and bad, and how good, and how bad? What prevents a promotion based on "loyalty to the team," disguised as a good thing?

8. We shun, or exclude from the community, someone who reveals the he or she is not committed to these working principles. Well, I would be happy to be shunned by this community - it really doesn't look like it's built for success. Faced with these rules, I'll deviate and find my own like-minded community.

So, to me those rules seem strange, particularly coming from an economist who, like the rest of us, is schooled in the role of incentives, the benefits of decentralization, and the virtues of competition. We might wish that things were more clear-cut in economics, but it's not going to happen. Our models have to be so simple that they are guaranteed to be wrong - they're always inconsistent with some phenomena, hopefully the ones we're not focused on when we construct the model. There can be radically different theories, with different implications, that are all consistent with the empirical evidence we have (which is often not so great). This just reflects the technological limitations of science - our ability to construct and analyze models, and our ability to collect data. Why not just embrace the diversity and move on?

At this point, you may be wondering what's bugging Paul. He must have something specific he's concerned about. To get some ideas about that, read Romer's recent AER Papers and Proceedings paper. This paper is in part about "mathiness." What could that mean? It certainly doesn't mean that using mathematics in economics is a bad thing. Paul seems on board with the idea that mathematical precision lends clarity to our economic ideas, while potentially keeping people honest. Once you write your economic argument down in formal mathematical terms, it's hard to cheat. Math, unlike the English language (or any other language on the planet), is unambiguous.

But, in trying to get our ideas across, math can work against us. A sophisticated mathematical argument may be impenetrable to the average reader. And a rigorous, mathematically-detailed, internally consistent model is not necessarily a good model. The model-builder may have left out details that are essential for addressing the economic problem at hand, or there may be blatant inconsistencies between the model and the empirical regularities that are germane to the problem. Even though Paul gives specific examples, however, I'm still not entirely clear on "mathiness." As far as I can tell, it's related to the impenetrability problem. A dishonest economist can construct a mathematically sophisticated model, churn out some results without being too careful, claim success, and hope no one notices the errors and inconsistencies. That would certainly be a problem, and I could imagine recommending rejection to the editor if I were asked to referee such a paper, or rejecting the paper if I were in an editorial position.

Is that what's going on in the growth papers that Paul cites in his AER P&P piece? Are the authors guilty of "mathiness," - dishonesty? I'm not convinced. What McGrattan-Prescott, Boldrin-Levine, Lucas, and Lucas-Moll appear to have in common, is that they think about the growth process in different ways than Paul does, with somewhat different models. Sometimes they come up with different policy conclusions. Paul seems to think that, after 30 years, more or less, of research on the economics of technological change, we should have arrived at some consensus as to whether, for example, Paul's view of the world, or the views of his competitors, are somehow closer to Romerian truth. His conclusion is that there is something wrong with the winnowing-out process, hence his list of rules, and the attempt to convince us that M-G, B-L, L, L-M, and Piketty-Zucman too, are doing crappy work. I'm inferring that he thinks their papers were published in good places (our usual measure of value-added science) because they are well-connected big shots. It could also be that Paul just doesn't like competition - in more ways than one.

© 2011–2017 e-axes. All rights reserved. | Credits | Contact Us | Privacy Statement | Sat 20 Jan, 2018 01:28:26 AM
e-axes is proudly powered by Norder - Creative Solutions