The rebel who blew up macroeconomics

22 November, 2016 at 15:18 | Posted in Economics | 1 Comment

rebel-rebel-logo1Paul Romer says he really hadn’t planned to trash macroeconomics as a math-obsessed pseudoscience. Or infuriate countless colleagues. It just sort of happened …

The upshot was “The Trouble With Macroeconomics,” a scathing critique that landed among Romer’s peers like a grenade. In a time of febrile politics, with anti-establishment revolts breaking out everywhere, faith in economists was already ebbing: They got blamed for failing to see the Great Recession coming and, later, to suggest effective remedies. Then, along came one of the leading practitioners of his generation, to say that the skeptics were onto something.

“For more than three decades, macroeconomics has gone backwards,” the paper began. Romer closed out his argument, some 20 pages later, by accusing a cohort of economists of drifting away from science, more interested in preserving reputations than testing their theories against reality, “more committed to friends than facts.” In between, he offers a wicked parody of a modern macro argument: “Assume A, assume B, … blah blah blah … and so we have proven that P is true.” …

Romer said he hopes at least to have set an example, for younger economists, of how scientific inquiry should proceed — on Enlightenment lines. No authority-figures should command automatic deference, or be placed above criticism, and voices from outside the like-minded group shouldn’t be ignored. He worries that those principles are at risk, well beyond his own field … And at the deepest level, he thinks it’s a misunderstanding of science that has sent so many economists down the wrong track. “Essentially, their belief was that math could tell you the deep secrets of the universe,” he said.

Bloomberg

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  1. I entered the University of Chicago in 1981 planning to study economics. But after several years of reading economics articles while doing high school debate, I decided first to take some serious science and mathematics courses. In the end, I got my degree in Chemistry with a side concentration in applied math, after realizing that economics was nothing but world-building fantasy.


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