Krugman’s blog, 2/6/16

There were two posts on Saturday, and none yesterday.  Saturday’s first post was “In Defense of Funny Diagrams (Wonkish):”

It’s all very simple
It’s all very simple.

Brad DeLong asks a question about which of the various funny diagrams economists love should be taught in Econ 101. I say production possibilities yes, Edgeworth box no — which, strange to say, is how we deal with this issue in Krugman/Wells. But students who go on to major in economics should be exposed to the box — and those who go on to grad school really, really need to have seen it, and in general need more simple general-equilibrium analysis than, as far as I can tell, many of them get these days.

There was, clearly, a time when economics had too many pictures. But now, I suspect, it doesn’t have enough.

OK, this is partly a personal bias. My own mathematical intuition, and a lot of my economic intuition in general, is visual: I tend to start with a picture, then work out both the math and the verbal argument to make sense of that picture. (Sometimes I have to learn the math, as I did on target zones; the picture points me to the math I need.) I know that’s not true for everyone, but it’s true for a fair number of students, who should be given the chance to learn things that way.

Beyond that, pictures are often the best way to convey global insights about the economy — global in the sense of thinking about all possibilities as opposed to small changes, not as in theworldisflat.

The reason I believe we should teach the production possibility frontier is that it gives students a way to think about what efficiency means — if you want to explain inefficiency in production, you put a point inside the PPF, if you want to explain inefficiency in allocation, you talk about choosing the wrong point on the PPF. The Edgeworth box is good for explaining what it takes to be efficient in production and also efficient in distribution — I learned all of this from the classic Francis Bator paper on welfare maximization — but is just too hard for freshpeople.

I also retain, even after all these years, a soft spot for at least some of the profusion of diagrams that characterized trade theory when I was a student. Some of it reached ridiculous levels — “you see, you can derive trade indifference curves by sliding the production possibility block along consumer indifference curves” — but some of that machinery can be very useful as tools for clarification.

And as I said, I have the sense that too many majors and/or grad students were shortchanged on this front. They can do game theory, they can solve sets of equations, but their sense of how the pieces fit together is lacking, and — at least in some seminars I’ve sat in on — too many don’t have the technique to cut through what should be easily avoidable confusion. (I sometimes find myself wanting to shout “Use an offer curve, dammit!”)

Now, it’s true that the real economy isn’t characterized by competitive general equilibrium. But it’s still a useful baseline — not so much an idealization as a description of how things should be, which helps to cast how they really are into much sharper relief.

Draw, baby, draw.

Saturday’s second post was “Electability:”

If you are still on the fence in the Democratic primary, or still persuadable, you should know that Vox interviewed a number of political scientists about the electability of Bernie Sanders, and got responses ranging from warnings about a steep uphill climb to predictions of a McGovern-Nixon style blowout defeat. And all of them dismiss current polls as meaningless.

You are, of course, free to disagree. But you need to carefully explain why you disagree — what evidence do you have suggesting that these scholars’ conclusions, which are based on history and data, not just gut feelings, are wrong?

And there are two really unacceptable answers that I’m sure will pop up again and again in comments. One is to dismiss all such analyses as the product of corruption — they’re all bought and paid for by Wall Street, or looking for a job in a Clinton administration. No, they aren’t. The other is to say that you’re willing to take the chance, because Clinton would be just as bad as a Republican. That’s what Naderites said about Al Gore; how’d that work out?

I have some views of my own, of course, but I’m not a political scientist, man — I just read political scientists and take their work very seriously. What I do bring to this kind of discussion, I hope, is an awareness of two kinds of sin that can corrupt political discussion.

The obvious sin involves actually selling one’s views. And that does happen, of course.

But what happens even more, in my experience, is an intellectual sin whose effects can be just as bad: self-indulgence. By this I mean believing things, and advocating for policies, because you like the story rather than because you have any good evidence that it’s true. I’ve spent a lot of time over the years going after this sort of thing on the right, where things like the claim that Barney Frank somehow caused the financial crisis so often prevail in the teeth of overwhelming evidence. But it can happen on the left, too — which is why, for example, I’m still very cautious about claims that inequality is bad for growth.

On electability, by all means consider the evidence and reach your own conclusions. But do consider the evidence — don’t decide what you want to believe and then make up justifications. The stakes are too high for that, and history will not forgive you.


One Response to “Krugman’s blog, 2/6/16”

  1. oregondave Says:

    Regarding Krugman and “Electability:” Someone please tell Paul that this year may be the best, and likely only, chance progressives have to show the polity how far away to the right our public discourse and consciousness has shifted in the last half-century. And the opportunity is in the likely nomination by the Republicans of a madman. Sure, it’s a risk that the madman becomes president, but that would come about if and only if enough of our fellow citizens are too far gone to recognize how they’ve been voting to screw themselves. In which case, we’re screwed anyway.

    Add to that my disappointment in his choosing to set up two flawed arguments to knock down as his straw men. You’ve done better work, Paul. Much better. C-

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