Professor Lucas was one of my heroes at the University of Chicago. In this cross-post, I link to his recent interview in the Wall Street Journal. I don’t think that the interviewer asked many serious questions. In my post, I offer my own set of questions that I would like to ask this intellectual giant. You will note that all of my questions focus on the ongoing recession and the role of modern macro economics in explaining recent events.
20 thoughts on “My Interview Questions for the Nobel Laureate Robert E. Lucas”
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I’d ask him for an apology. Don’t imagine I’d get it. But, that’s really the only kind of statement he should be making at this point.
You choose your hero very poorly.
No, Matthew has chosen a very well-fitting hero.
All I remember about him was his disastrously wrong “rational expectations” supposedly explaining why monetary and fiscal policy can’t work.
He’s part of the group of people who assume people are wealth-maximizing sociopaths who can enter into complex contracts with no costs.
Looks to me like the same jokers who pick Nobel Peace Prize winners (Kissinger, Obama) pick the Economics Prize winners. And yes, Professor Kahn, I do know that the Peace and Economics are awarded somewhat differently than the Chemistry, Physics, Literature (what, no Tolstoy, Twain, or Zola?) and Physiology/Medicine prizes.
KLG,
Technically, the economics prize isn’t a Nobel Prize. It’s a Johnny-come-lately and I think is called a “Nobel Memorial” prize. In a certain sense, it has the same pedigree as the Ig Nobles.
The scary thing, however, is that economics has insinuated itself at the core of the modern university, supplanting both the natural sciences and the humanities, and leading the social studies. To a large extent, this follows the funding. There is never a shortage of rich people who want to give enormous fortunes to business schools. But it also tracks a broader cultural trend: the commodification of everything, and the irrelevance of the uncommodified. And it tracks an intellectual trend triggered by the WWII triumph of physics: the primacy of the mathematical method in the academy.
The trends are what they are. The problem is that economics (or the modern scientistic social studies) is a weak basis for understanding the world of affairs: a world of judgment, rather than analysis. There is too much tendency these days to describe the world with silly toy models, and stop there, without any appreciation of context or complexity. (Our friend Matthew exemplifies this on his bad days.) Blame it on the economists, or at least a large subset of the tribe. Physicists have always known better: “elegance is for shoemakers and tailors.” (Didja know that “mathematical physicist” is a term of opprobrium among honest theoretical physicists?)
History should be the queen of the social studies, with economics one of the handmaidens.
“All I remember about him was his disastrously wrong “rational expectations†supposedly explaining why monetary and fiscal policy can’t work.”
With the stimulus, the economy turned out worse than was predicted without a stimulus. What part of this demonstrating that monetary and fiscal policy don’t work the way the models claim are you having trouble with?
You know, Newtonian physics is actually a pretty good approximation for slow, light things. Just because a model works in one range, doesn’t mean it does in another. Maybe our current economic models are only good at relatively low levels of debt, stimulus, and regulatory uncertainty. We’ll never figure it out if disagreeing with them is treated as heresy.
Brett,
1. Newtonian physics is a good approximation for slow heavy things, not slow light things. Fast things are relativistic; light things are quantum mechanical.
2. What are you trying to argue?
Do not freed the lying troll.
Hmm. I begin to understand. Economic forecasts are exactly right, but the economic theory undergirding them is wrong.
Brett - You do understand that more recent information has demonstrated that the economic contraction in progress at the time that the 2009 stimulus was adopted was much more severe than was understood at the time? And that the failure to accurately measure that kind of information would skew both the recommendations and results of actions based the recommendations in fairly predictable ways?
What part of “predictions based on faulty inputs tell us nothing about the validity of the model” are you having trouble with?
Ebenezer,
if only your skepticism concerning the use of “silly toy models” extended to their misuse in the climate change controversy…
Drkrick - You do understand that models are tested by using the information at hand when the prediction is made, and then checking the output of the model against the “more recent information”? Pretty much any model can be fitted to “more recent information” after the fact…
The inputs were not faulty, they just didn’t include the outputs the model was supposed to arrange to generate. A model that needs those to give good predictions is fairly worthless.
Brett, the level of economic contraction during 2008 has been remeasured several times, and every time the contraction *then* was found to be even worse than previously realized. That’s what drkirk meant by “more recent information”.
I think the commenters here are being too narrow. Robert Lucas, whatever his political orientation, is a creative theoretician whose views command attention. I thought Matthew’s questions were quite interesting. I’d like to hear Lucas’s answers. We have to guard against epistemic closure, and against an overly crude political take on someone’s scholarly investigation.
Redwave:
The hockey stick graph is not a model. It is derived from a set of empirical observations. No climate modeling goes into it: just models of things like isotope distribution, which have proven pretty reliable.
The imputed causal relationship between the hockey stick graph and anthropogenic behavior does rely on models. They are not silly toy models of the sort used in economics (“postulate a uniform spherical psychopath”.) They mostly rely on physical science, which I believe is the most compelling claim to certain knowledge that we have. (Some folk prefer revealed knowledge, but you don’t seem to be one of them.) Although these models suffer from some interpolation, extrapolation and approximation (don’t all models?), they have a fair amount of internal consistency going for them, and predict the hockey stick graph better than any other competing model. These models tend to suffer from one defect-they have been too conservative in their predictions.
I’ve seen some intelligent posts from you in the past. Why oh why do you have to set yourself up for demolition like this?
Harold:
Right you are that Lucas is a smart guy. If he’s dealing in good faith (something I have no opinion about), he’s worth listening to. In my youth, I always assumed good faith on the part of any smart interlocutor. Over the last ten years, I’ve seen the error in my ways-it is always an open question for defenders of the oligarchy.
I also thought that Matthew’s questions were interesting. I am very interested in the kind of mindset that views “growth” solely in terms of GDP, and leaves out all questions of distribution. My interest, of course, is psychopathological.
drkrick: This is excuse-making on behalf of Obama. In fact, it was well understood at the time that the stimulus was inadequate.
Brett’s little sleight-of-hand here is more amusing than yours, because in no other circumstance would he accept the administration’s projections as accurate. However, serious-minded economists understood at the time that the administration was wrong. Here’s what Krugman was saying in real-time.
Harold, why should we regard Lucas as being credible as regards the current slump? Has he said something accurate about it at some point?
“Robert Lucas, whatever his political orientation, is a creative theoretician whose views command attention.”
This form of this sort of argument is usually correct. I can appreciate an artist’s good work in a music genre I don’t like one bit.
Lucas’s main focus, however, is on push ever more elaborate deductions from faulty assumptions about human behavior and motivations. There is NO value in this, no more than there is a brilliant intelligent design biologist. Actually, he’s worse, as his work has been the source of much suffering in the world.
“In my youth, I always assumed good faith on the part of any smart interlocutor. Over the last ten years, I’ve seen the error in my ways–it is always an open question for defenders of the oligarchy.”
Very well said, and unfortunately my experience as well.
I’ll even go further. A lot of right-wing economic policy wonks, most notably Richard Posner, Bruce Bartlett, and David Frum, have admitted that neoclassical economics’s faulty assumptions have let them and the people running the government to make grievous errors. They’ve come clean and admitted their own mistakes. They’ve all remained conservatives but have adapted to realty.
Others, like Greg Mankiw, are willing to deviate from the straight right-wing orthodoxy on particular issues, such as the gas tax, even while continuing to make bad-faith arguments on other fronts.
Lucas, as best I am aware, remains a complete and unredeemed hack, as you can see from this power-point slide from a few months ago about the best responses to the current depression:
-
• Believe it is more accurate to say that the problem is government is
doing too much
• Again, I see analogies to the U.S. of the 1930s
• Likelihood of much higher taxes, focused on the “richâ€
• Medical legislation that promises large increase in role of government
• Financial legislation that assigns vast, poorly-defined responsibilities
to Fed, others
• Are these conditions that foster a revival in business investment, consumer
spending?
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