Econometrics

Reader comment on: The Actual Blinder Zandi Recession Paper

Submitted by J.Johnson (United States), Jul 30, 2010 09:00

When I took Economics courses in college I was struck by the fact that almost any outcome could be derived in any situation simply by manipulating the many assumptions that were made beforehand. Sort of like the old joke about the economist who, floating around in a boat with a can of tuna but no can opener, told his companions that his solution to the problem was to simply 'assume a can opener.' Paul Samuelson (and a few others) compounded this problem many decades ago by introducing complex mathematics into the study of economics at the graduate level, giving the subject and its practitioners an aura of precision that was almost comical. Alan Blinder has written (to Harvard economics professor Greg Mankiw, among others) that he prefers to have his papers published in venues of general interest, rather than in peer-reviewed journals, so that he can reach a wider audience. A cynic might wonder if he also does it so that his analyses won't be ripped to shreds by others applying the same mathematics but different assumptions to reach opposite conclusions. As for Zandi, he appears to have mostly slept through the housing bubble as he watched Moody's slap AAA on everything. Krugman breezes along with his NY Times pieces, rarely looking back to explain why he got some earlier conclusions totally wrong, such as those about speculation in the crude oil market.

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