Monday, September 07, 2009

Krugman on Macro

A really good article in the New York Times by Paul Krugman under the title How Did Economists Get It So Wrong?. I particularly love the line, "As I see it, the economics profession went astray because economists, as a group, mistook beauty, clad in impressive-looking mathematics, for truth."

Interestingly co-incides with my starting to wade through Tony Lawson's Economics and Reality which in its openings suggests a similar aspect to the orthodox school - that is, they are so transfixed by the mathematical elegance that they miss the point that they re increasingly describing something other than reality.

This does open up that other wonderful line of enquiry on the relationship between mathematics and science. In my earlier comment I didn't allude to the long history of the association between physics and economics through maths (see More Heat than Light or How Economics became a Mathematical Science). It is interesting to posit that both economics and particle physics have reached dead ends because of the mathematics they are choosing to use and that the path forward will entail a step out to a new sett of explanatory tools.

I believe those tools will be mathematical, though there is an alternative offered by Stephen Wolfram's New Kind of Science. His ideas have not received wide acceptance, though possibly because they are written in such a horrible self-promoting way. But the concept is alluring - that explanations can be sought through assumptins that the basic explanation is in rules not formulae. In economics this would be the ultimate end point of reserach in agent based computational economics. In physics it could just be that the fundamental "particles" could be replaced by "fundamental computations".

But that perhaps is fanciful - and I don't want to distract from Klugman's great work.

Note: My thanks to Richard Farmer in Crikey (behind the paywall) for writing about the article. Perhaps though he could learn to put the whole paragraphs he lifted from the original inside quotation marks.

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