faulker020

Every so often, self-described "heterodox" econ people will  show up in my Twitter feed  or (less often) my blog comments, declaring that new methodologies are poised to topple mainstream economics. My typical response is to ask what these new methodologies are. But incredibly, I can almost never get an answer. When I ask what the new methodologies are, people very rarely try to give concise explanations. Instead, they almost always direct me to one of the following: 1. A book 2. A paywalled journal article 3. A video link Books, of course, must be bought, so the book and gated article links are basically a request that I fork over cash before I even learn the very basics of what the new methodologies are. Video links, of course, are almost always useless. On those rare occasions when a heterodox person does link me to a PDF purporting to explain the new methodologies, the content of the document is usually just more criticism of mainstream methodologies ( see here, for examp...

Unfortunately, I see that my friend Allison Schrager has misinterpreted my proposal for reforming Econ 101. I often suggest that empirics be taught in 101. My idea is to teach some simple empirical methods alongside some simple theories, so that 101 students get an idea of how economists tell good theories from bad ones. The idea is not to remove theory from 101. Unfortunately, I seem to have convinced Allison that this is what I was suggesting, for she writes: Noah Smith also thinks economics education needs an overhaul. He believes statistics, rather than theory, should be central to economics training. Right now statistics is important, but as a tool to help understand and validate theory. It is not taught until students are further along in their economics education. Smith thinks it should be the other way around in order to prevent students from putting too much weight on one theory.  But for the same reasons the British students are wrong, Smith misses the point. Statistics...

"Imagination/ That's the way that it seems/ A man can only live in his dreams" - The Flaming Lips Thirtysomethings like myself - the leading edge of the Millennial generation - often speak with reverent nostalgia of the 1990s. We make silly songs about it . Twentysomethings - the younger Millennials - are confused by this. What made the 90s so amazing? I want to explain. In many or even most ways, life is better now than it was then. We have smartphones - supercomputers in our pocket! In the 90s we didn't even have cell phones. We have social networks now - in the 1990s you had to keep in touch with old friends by email. We have GPS and digital cameras and YouTube and Yelp. Society is better now too. We have gay marriage now - that was a pipe dream in the 90s. So was a black president.  What did we have? We had expectations. The world of the 1990s wasn't the best world in history. But for Americans, it was improving at a faster rate than at almost any other time...

So, Bryan Caplan won a bet with Tyler Cowen regarding the unemployment rate. Cowen bet that unemployment wouldn't go below 5% at any time between 2013 and 2033. It recently did, so Caplan won the bet 17.5 years before the deadline. Paul Krugman says that this is vindication for cyclical theories of unemployment, as applied to the Great Recession, over structural theories. Tyler says: Not so fast . Unemployment may be down, but the employment-to-population ratio has barely budged: He then cites some labor search theory papers, such as this one by Restrepo and this one by Elsby and Shapiro, that describe various situations in which we might see substantial structural unemployment. All in all, Cowen declares that "I feel I'm the one who won the bet."  So who is right? Caplan and Krugman are mostly right, and possibly completely right. Cowen is at least mostly wrong here. The reason? Aging. The Great Recession came along just as Baby Boomers were starting to retire, w...