Chicago economics — a bit out of touch with the real world

23 Mar, 2020 at 08:34 | Posted in Economics | 1 Comment

new classicalTom Sargent is a bit out of touch with the real world up there in his office … Certain people have a capacity for ignoring facts which are patenty obvious, but are counter to their view of the world; so they just ignore them …

Sargent is a sort of tinkerer, playing an intellectual game. He looks at a puzzle to see if h ecan solve it in a particular way, exercising these fancy techniques.

Alan Blinder

Do you think this is too harsh? Well, then I suggest you read the following excerpt from the interview with Sargent in Arjo Klamer’s The New Classical Macroeconomics (1984):

People say that many of your assumptions are unrealistic.

It is true that these assumptions are unrealistic.

…

Do you feel comfortable with them?

Yes, about certain matters. I’m aware of all the problems with them. There are philosophical contradictions about using this methodoology. Deep down I don’t believe in them, but I don’t have a better method of understanding what’s going on out there.

But if the best is not good enough? Wittgenstein’s dictum in Tractatus Logico-Philosophicus comes to mind:

Wovon man nicht sprechen kann, darüber muss man schweigen.

1 Comment

  1. There we go. I knew there was a reason I posted my “economists looking for the lost keys under the streetlamp” comment. Though then I was thinking (I think) of a Robert Samuelson phrase that Prof. Syll had quoted.

    ObBlues: “If it wasn’t for bad theories, I wouldn’t have no theories at all.”

    Comment by Mel— 23 Mar, 2020 #


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