Reply to Paul Krugman and other Rabble-Rousers

Well, the blogosphere is a strange place, full of funny people. Sometimes people ignore me. Sometimes I hit a nerve and an organized mob goes to work. I wrote this, John Quiggin replied with this, and Paul Krugman felt the need to stand up for his comrade with this.

Like everything I've done in this blog, I've learned from this. People have come back with interesting comments, and we've worked through some ideas. I learned something about some work that exists out there, and about some interesting people.

Krugman seems to think that I'm somehow "pulling rank" on John Quiggin. Well, the story of my life is being misunderstood, so I'm accustomed to this. In my original post, I'm just giving you a factual account of how I happened to be reading Quiggin's book. If I tell you that, previous to getting the book in the mail, I had never heard of John Quiggin, that's certainly not his fault, nor does that mean that I think the guy is a dope, or that I'm somehow better than he is. Holy crap! Who am I anyway? I have not worked at any institution (save perhaps the Minneapolis Fed) that anyone would rank in the top 20 in the world. I typically work on things that people find somewhat esoteric and cultish. I grew up in small-town Ontario and was educated in public schools. My parents were well-educated, but basically lived hand-to-mouth.

Quiggin is a very interesting case. He has a strong technical background, and has an enormous number of citations for a paper published in 1982 that seems to have been written when he was an undergraduate. That paper is in decision theory, which I find hard, and he has published other work in that vein. The man writes, and has written, an enormous amount. His keyboard must be on fire.

The bone I have to pick is with his damn book. There are some theorists that see modern macroeconomics and like it. It fits together like things they already know, the language is similar, and one can see how standard economics can be put to work to understand aggregate phenomena. Quiggin is not like that though. If you read Zombie Economics and this paper, with names redacted, you would not know it was the same person, as Zombie Economics reads like fringe economics (Austrians, Post-Keynesians, etc.). In fringe economics, the game is dismissing things you know little about, and offering little that is actually constructive.

Quiggin and Krugman indeed have a lot in common. They are smart people, with demonstrated success in particular branches of economics, but with little or no knowledge of what makes modern macroeconomics tick. In part, they seem to think that modern macro is a tool of right wing conservatives and therefore needs to be destroyed. Let me assure you that modern macro is not inherently a tool of any particular ideology. It just forces you to work harder to find the appropriate role for government. But the result is better policy.