Monday, January 26, 2015

Shots Fired: AEA Meeting in Boston

David Warsh has a fascinating report from the recent American Economic Association meeting in Boston. I am not sure this is an all out attack on mathematical economics, but it is a nice artillery hit on one faction:

It was [Paul] Romer, 59, of New York University, who made a little news earlier this month at the economists’ meetings in Boston when, at a session designed to showcase various contributions to “new growth theory,”  his own and others’, he turned to Robert Lucas and denounced Lucas’s “mathiness” in the matter.

Lucas, 77, of the University of Chicago, who, thirty years before, had put Romer in business, and one of the most scrupulously honest men in the profession, shrugged, but the tension was palpable.

“Mathiness,” said Romer, involved the use of the math the way a politician would use it – to persuade by misleading. The analogy was to “truthiness.” That coinage, meaning a conviction of certainty arising from the gut that requires neither logical nor evidentiary confirmation, was introduced by satirist Stephen Colbert and has been much employed by New York Times columnist Krugman. Mathiness was designed to enrage.

There is, said Romer:

a level of just dishonesty in the paper [by Lucas and Benjamin Moll] that was really striking. The notion that somebody knows everything that will ever be known was basically hidden in their paper…

Replied Lucas, quoting Robert Sol

Every theory contains assumption that are not quite true. That’s what makes it theory.


1 comment:

  1. "Every theory contains assumption that are not quite true." Yeah, but there's a difference between holding a variable constant to see what happens if you change another variable. That's a theory. Making assumptions in order to get the outcome you expect is called confirmation bias.