Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
I included Solow and Stiglitz as they are highly critical of the status quo in economics. Solow and Colander both testified about the problems of the dominance of limited views of economics before a House subcommittee in 2010, both being especially critical of DSGE and it being the only model for which Fed funding was available for research. While having Nobel prizes they have been willing to publicly criticize much of the rest of, for lack of a better term, 'mainstream economics'. There are 'top journals' and those journals are or were recently controlled by nominees of institutions with views whose implications soothe the prejudices of very wealthy donors to their universities - the insane 'new classical' views of Robert Lukas, currently emeritus professor at Chicago, described by Greg Mankiw of Harvard Mankiw as "the most influential macroeconomist of the last quarter of the 20th century." etc. And the overall prestige of Harvard compensates to a degree for any lacking in their economics department.

Within the professional lifetimes of current economists, such as Perry Mehrling, it was necessary for Columbia to accept published monographs as the basis for his PhD, as he could not get his work on money and banking published in 'top journals'. But you can dismiss this if you will. I cite it as Mehrling was the one from whom I learned about money and banking. And I see the stranglehold that such figures, along with the practices of the Fed have on what is acceptable in the economics profession as being very detrimental to what our society needs to do to create a livable and sustainable society. This might not affect you so directly as you are not currently on an academic track.

Wait too long for needed changes and the very possibility of such change can be eroded. That is what happened when Trump was elected. Had Obama even done what the Justice Department could do to bring Wall Street executives to account, that might have changed popular perceptions and the outcome in 2016. On the other hand, I appreciate Obama's restraint on foreign policy, especially as contrasted with Hillary. Hillary certainly is and has been her own person. In this election she might have done better to listen more to Bill and less to Mook and Podesta. And while having control of the DNC almost as an inheritance and Hillary's use of the DNC did stymie Sanders, that was and is indefensible as a practice for primary elections. And it did not work out too well this time.

Twice in the last eight years the selection of very centrist Democratic candidates for President has resulted in enormous missed opportunities. In 2009 we could have reset regulation of Wall Street to an updated version of what FDR bequeathed, but Obama was never going to do that. Opportunity missed. Then there is Sanders in 2016. Another opportunity missed. Are we ever going to learn? I hope so for your sake, as you might not be able to retire in place in your current home if climate change continues to exceed generally acceptable expectations. At least you are on the Gulf coast. The Atlantic coast will be worst and soonest hit.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Feb 12th, 2017 at 08:08:38 PM EST
[ Parent ]
Stiglitz and Solow are not criticizing the mainstream academic school of thought. They are calling out the overtly partisan hacks that even other mainstream scholars are uncomfortable with.

This puts Stiglitz and Solow outside the mainstream culture of economics, which doesn't police partisan hackery as long as it is politically correct partisan hackery. But it does nothing to put them outside the mainstream research tradition.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Feb 13th, 2017 at 07:14:52 PM EST
[ Parent ]
And that distinction between culture and research tradition is vital. IMO, the chief reason we don't see such critiques more often is the high price so many can be made to pay for offending the interests of wealthy sponsors of self serving theory, from J.D. Rockefeller to the Koch Brothers and a whole bunch more. It is the results of those wealth serving pressures that economics resembles the fashion industry more than a scientific discipline and it is that with which I profoundly disagree. It is pressure from wealthy donors that keeps the public understanding of economics confounded and that allows the perversion of economics to do actual harm to the broader society. For instance, see Varoufakis, A Most Peculiar Failure, where he shows the way in which weak and strong claims for unprovable nonsense has marked the public discourse over economics for decades - actually, for more than a century.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Feb 13th, 2017 at 08:00:32 PM EST
[ Parent ]
And Thomas Piketty is well within the research tradition of economics, which is why Capital is so important. Among other things it makes things more difficult for the partisan hacks, as you term them. Not that they ever seem to suffer consequences, witness Reinhart and Rogoff. Growth in a Time of Debt simply did too great a service to the donors' interests for the authors to ever be seriously discredited.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Feb 13th, 2017 at 08:09:36 PM EST
[ Parent ]
Joseph Stiglitz -- Wikipedia, the free encyclopedia
Stiglitz's most famous research was on screening, a technique used by one economic agent to extract otherwise private information from another. It was for this contribution to the theory of information asymmetry that he shared the Nobel Memorial Prize in Economics in 2001 "for laying the foundations for the theory of markets with asymmetric information" with George A. Akerlof and A. Michael Spence.

Before the advent of models of imperfect and asymmetric information, the traditional neoclassical economics literature had assumed that markets are efficient except for some limited and well defined market failures. More recent work by Stiglitz and others reversed that presumption, to assert that it is only under exceptional circumstances that markets are efficient. Stiglitz has shown (together with Bruce Greenwald) that "whenever markets are incomplete and/or information is imperfect (which are true in virtually all economies), even competitive market allocation is not constrained Pareto efficient". In other words, they addressed "the problem of determining when tax interventions are Pareto-improving. The approach indicates that such tax interventions almost always exist and that equilibria in situations of imperfect information are rarely constrained Pareto optima."

Thus Stiglitz used a more strict, mathematical research tradition, and confronted the orthodox culture.

And currently, he is weighty activist in his critique:

Joseph Stiglitz Says Standard Economics Is Wrong. Inequality and Unearned Income Kills the Economy -- Evonomics.com

by das monde on Tue Feb 14th, 2017 at 12:54:33 AM EST
[ Parent ]
First of all, it's "Lucas," not Lucas.  Second of all, he hasn't been anything resembling "mainstream" for a long-ass time.  Shit, Lucas has become a laughing stock by the time I was an undergrad -- and at a university notoriously infused with Koch money at that.

Greg Mankiw is a half-decent mathematician masquerading as a serious economist.

Once again, "mainstream" isn't whatever gibberish you read on some idiot blog.  If you want mainstream, read Krugman and you "heterodox" friend, Stiglitz.  Both of whom are more representative of the mainstream that these people you keep bringing up.

Stiglitz's consumption function was the foundation for both his and Krugman's Nobels.  Solow's growth model is literally the first model they teach you in every Macro 201 class.  We in "not even wrong" territory here.

As for the Hillary/Bill/conspiracy theory on the DNC and Bernie bit -- now you want her to listen to Bill, the Unholy God of "Neoliberalism".  Helpfully demonstrating what a bunch of horseshit the whole conflict was the whole time.

Complete gibberish.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Tue Feb 14th, 2017 at 02:51:56 AM EST
[ Parent ]

God damn, that comment from me was like an Autocorrect Holocaust.  Sorry.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Tue Feb 14th, 2017 at 02:55:33 AM EST
[ Parent ]
You needed this control shot...

Nothing about a consumption function on the Wikipedia page on Stiglitz.

What is taught in freshman courses is not necessarily mainstream in policy building. Economics is a motley subject, with a lot of speculative assumptions, ideological deductions, hand waving with graphs and some serious math, mechanism design. The same economist can easily produce something standard for a freshman course and a theory against prevailing operative streams.

by das monde on Tue Feb 14th, 2017 at 04:58:58 AM EST
[ Parent ]


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