Thursday, July 8, 2010

Economics is Hard

I earlier intoned that economics is easy, fun, and your friend. Not everyone agrees:
In this essay, I argue that neither non-economist bloggers, nor economists who portray economics - especially macroeconomic policy - as a simple enterprise with clear conclusions, are likely to contribute any insight to discussion of economics and, as a result, should be ignored by an open-minded lay public. ...

the Tsunami in East Asia, and the recent earthquake in Haiti ... collectively took the lives of approximately half a million people, and disrupted many more. Each of these events alone, and certainly when combined, had larger consequences for human well-being than a crisis whose most palpable eect has been to lower employment to a rate that, at worst, still employs fully 85% of the total workforce of most developed nations. However, neither of these events was met by (i) a widespread condemnation of seismology, the organized scientic endeavor most closely “responsible” for our understanding of these events or (ii) a flurry of auto-didacts rushing to oer their own diagnosis for what had happened, and advice for how to avoid the next big one. Everyone understands that seismology is probably hard enough that one probably has little useful to say without first getting a PhD in it. The key is that macroeconomics, which involves aggregating the actions of millions to generate outcomes, where the constituents pieces are human beings, is probably every bit as hard. This is a message that would-be commentators just have to learn to accept.
Hat tip: Mankiw, one of the macroeconomics bloggers who was not named and shamed by the author.

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