Krugman is Confused

I wrote about the 2011 Nobel prize that went to Sargent and Sims, then read what Krugman has to say.

If you have been reading Krugman, you know that he thinks the IS-LM model is great, that bad economists are the ones who use sophisticated mathematics, and that we are in a Dark Age of Macroeconomics that began in the 1970s in "freshwater schools" like the University of Minnesota. Are those views consistent with this?

...before Sargent and Sims came along, econometrics consisted largely of estimating models you had no good reason to believe based on identifying assumptions (if you don’t already know, you don’t want to) that lacked credibility. S and S played a key role in developing methods that let the data speak instead.

Krugman does not seem to understand that the "incredible identifying assumptions" came from Old Keynesian IS-LM economics. 1970s rational expectations macroeconometrics, developed by Sargent and Sims, tells you that the identifying assumptions that went into expanded IS-LM estimated models like the FRB/MIT/Penn model, were incredible, and that we should throw those models out.