Krugman’s blog, 5/17/17

There was one post yesterday, “Calling Literatures From The Vasty Deep:”

Noah Smith has a very nice essay on how to deal with people who try to ward off serious criticism of their ideas by appealing to a “vast literature” you don’t know. As he says, sometimes there are vast literatures of nonsense, or at any rate of dubious quality, that mainly serve to protect vested intellectual interests.

Yet of course there are also cases in which you really should know something about existing research before opining, and Noah has a clever device: the Two Paper Rule. Give me two papers in this vast literature that are “exemplars and paragons” of the literature. If you can’t, the whole literature is probably a waste of time.

Which of course sets some of us to work trying to think of the two papers we’d recommend in particular areas of interest. So, some of my examples.

Noah is generally very down on macroeconomics, but I believe that we’ve learned a lot in macro since the 2008 crisis. Take fiscal policy: before the crisis there was strikingly little solid evidence about its effects, largely because history gave us so few natural experiments (causation generally ran from business cycles to budgets rather than the other way around). But the crisis gave us both some experiments via austerity and a renewed search for historical cases. I’d point to Blanchard and Leigh, using austerity as an experiment, and Nakamura-Steinsson, exploiting regional shocks from defense spending. Not saying these are the only fine papers, but they’re enough to show that there’s a real there there.

I think we’ve also had some dramatic confirmation of what some of us thought we knew about monetary policy at the zero lower bound. I can think, for example, of a 1998 paper that has held up really well; but I’ll leave that as an exercise for readers.

What about trade? Autor/Dorn/Hanson on the China shock may not be the last word, but surely a revelatory approach. In a strange way, I’d put Subramanian and Kessler in the same category: realizing that this globalization is different from anything that came before is a big deal.

I guess that in a way I’m pushing back against Noah’s nihilism (noahlism?) even while endorsing his method. I think there has been a lot of good economics done, even if there are also vast literatures not worth your time.

Lovely neologism there, or should I say “noahlogism?”



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