
The Trouble with Macroeconomics (2016) [pdf] - jeffreyrogers
https://paulromer.net/wp-content/uploads/2016/09/WP-Trouble.pdf
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pg_bot
Looks like the link is broken, I believe you can find a mirror here:
[https://ccl.yale.edu/sites/default/files/files/The%20Trouble...](https://ccl.yale.edu/sites/default/files/files/The%20Trouble%20with%20Macroeconomics.pdf)

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jason_slack
The original link works for me...

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kauffj
Macroeconomics is a tour of either a cemetery or a construction site.

[http://daviddfriedman.blogspot.com/2010/09/living-dead-
thoug...](http://daviddfriedman.blogspot.com/2010/09/living-dead-thoughts-on-
macro-and.html)

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reneberlin
Forbidden:

It looks like, someone has put the pdf behind bars (.htaccess)

[https://paulromer.net/wp-content/uploads/2016/09/WP-
Trouble....](https://paulromer.net/wp-content/uploads/2016/09/WP-Trouble.pdf)

->

Forbidden

You don't have permission to access /wp-content/uploads/2016/09/WP-Trouble.pdf
on this server. Apache/2.4.18 (Debian) Server at paulromer.net Port 443

\--

Maybe the traffic from HN raised the flags, i guess.

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jason_slack
It works for me, now.

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dannyw
This is an interesting paper, but it’s fairly deep and doesn’t provide a lot
of context for someone not in the field. Could someone summarise?

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cinquemb
This is a good chart (and annotations)[0] that reflects "…facts can end up
being subordinated to the theoretical preferences of revered leaders."

[0] [https://www.alhambrapartners.com/wp-
content/uploads/2018/09/...](https://www.alhambrapartners.com/wp-
content/uploads/2018/09/ABOOK-Sept-2018-CBO-2007.png)

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grandmczeb
It’s not clear to me what the chart supposed to be showing.

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pavpanchekha
As far as I can read it, the top half shows (in blue) two estimates of
"potential GDP", which is a measure of how much an economy could produce if
all available resources were used to the fullest. (For example, an economy may
be below potential because of difficulty matching workers to jobs, or credit
to investment, for example.) Both blue lines are estimates of potential future
GDP, with the light blue line the estimate made in 2007 while the dark blue
line is the estimate made in 2018. Then, against this potential GDP line, the
red line is the actual GDP at those times. The bottom half of the figure is
the same data, but zeroed at the red line and flipped, so the blue shapes are
how far the economy was below potential GDP, according to the 2007 and 2018
estimates.

I think the grandparent is implying that the 2018 estimate is modified to suit
the preferences of revered leaders (not sure who... Trump? Obama? Yellen?
Powell?), presumably to portray the economy as doing well (whereas the 2007
estimate would suggest the economy is still far below its potential). I _am_
guessing at the grandparent's intentions, so it would be good to get
clarification.

I think it is a silly claim. One reason for the 2007 estimate to differ from
the 2018 estimate is political bias. Another is 11 extra years of data.

And plenty of anecdotal signs suggest the 2018 estimate is clearly better than
the 2007 estimate. According to the 2007 estimate, the economy is slowly
falling further and further behind its potential. Does anyone think the
employment situation is currently _worse_ than 2010? If improving the
unemployment rate from 10% to 4% just leads to treading water against
potential GDP, how low does it need to go to catch up? -10%? (Unemployment is
relevant here because one of the underutilized resources in the economy ~2009
was workers: plenty were without work.)

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cinquemb
>I think the grandparent is implying that the 2018 estimate is modified to
suit the preferences of revered leaders (not sure who... Trump? Obama? Yellen?
Powell?), presumably to portray the economy as doing well (whereas the 2007
estimate would suggest the economy is still far below its potential).

I take revered leaders to be those who drive the economic models being used to
calculate what people are supposed to believe… it could be those figure heads
you mention, but it also could encompass a larger swath of people.

>Does anyone think the employment situation is currently worse than 2010? If
improving the unemployment rate from 10% to 4% just leads to treading water
against potential GDP, how low does it need to go to catch up? -10%?

If one ignores all the changes that have happened to see how the unemployment
rate ("where 17 million American workers don't just disappear") is even
calculated then sure, the economy is better, because the unemployment rate
says so…

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dalbasal
There's a reason that formal/natural science has some conventional standards.
Theories need to be (at least theoretically) falsifiable, or they fall outside
of Popper's "scientific theory" definition. Studies need to follow
conventions, like double blindness whenever there's a slight chance a
researcher could influence results, even unknowingly. Replicability,
transparency...

Without these standards, science breaks down. Biases slip in. Authority slips
in. "Fact" loses _its position as the ultimate determinant of scientific
truth._

In the deep waters of theoretical physics, the "problem" is that the
scientific method gets to be a little abstract. A theory is falsifiable, in
principle, but not in practice.

Economics is not a science in the strict, Popperian sense. This essay
demonstrates why. Without Popperian standards, you get finger pointing and
unresolvable claims of intellectual dishonesty.

This doesn't mean that science is perfect, but it is distinct from
nonscientific (including social "science" fields). A history book written in
2068 will, based on no new information, give a totally different account of
historical cause and effect to the ones we write today. Darwin's or Newton's
differ only inasmuch as new information has become available since hey were
written.

This isn't a bash on economics (or history, etc.). Most things are not
science.

What _truly_ caused the fall of the Roman Empire. 18th & 19th century imperial
historians thought it was debauchery, echoing their zeitgeist about carnal
desires and moral rot. Marx thought it was historical materialism. 20th
century historians focused more on cultural influx & migrations. Later 20th
century historians liked more postmodernist "one damned thing after another"
explanations.

The model(s) for linking monetary policy to inflation rates are not science.
There is no agreed upon method for one model displacing another one. Of course
everyone is accusing eachother of bullshitting.

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grigjd3
I did numerical simulations on black holes and the scientific method felt
incredibly concrete to me. I was working on models that would be put to test
by LIGO and further future GW detectors. Theory->prediction->test (in
observation if not in lab). I don't know how much more concrete that gets.

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petermcneeley
Ya this thought is common "In the deep waters of theoretical physics, the
"problem" is that the scientific method gets to be a little abstract. A theory
is falsifiable, in principle, but not in practice." but I dont know of an area
where it applies. Even the vacuum energy (way beyond my academic level) is
verified in experimentation with the Casimir effect.

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grigjd3
I think the sentiment might be driven by breathless and hollow pop-science
like Michio Kaku books.

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elmar
The Myth of "Macroeconomics"

[https://mises.org/wire/myth-macroeconomics](https://mises.org/wire/myth-
macroeconomics)

