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Good Advice for Economists

September 11, 2010

So I’m spending my Saturday morning (recovery) lying in bed and reading Paul Krugman’s debate with James Galbraith on the profession of economics.

It’s a fabulous discussion, in which PK is at his communicative best. He truly has an extraordinary clarity and simplicity about his style of writing. It’s as if all unnecessary verbal nformation is left behind and only the key ideas are expressed.   I am envious.

Most memorable however are two of these ideas: Firstly – to paraphrase – that economics should and must be mathematical, since one of the most important jobs of an economist is to use math to make sure that an economic “story” hangs together. Thus, he recommends his own rule of thumb, that

“you should always check an argument both with a back-of-the-envelope calculation and by consulting with the real experts, no matter how plausible and reasonable its author sounds…experience shows that there are many influential intellectuals who are prepared to make sweeping pronouncements on economics without doing the arithmetic. And by the way, throwing around lots of statistics is not the point: It’s a question of thinking hard about how the statistics fit together.”

And he also notes, amusingly, that maths in econ is essentially about confronting the truth remarked on by Keynes that

“economics is a difficult and technical subject, but nobody will believe it.”

One last little quote:

“…I make this admission partly out of a general belief that it is better to own up to a mistake than to dig yourself in ever deeper by trying to deny it–although few people seem to follow that practice.”

 

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