Paul Krugman has argued that it’s really “the dominance of M.I.T.-trained economists in policy positions and policy discourse” that’s worth noting. Over at Bloomberg News, however, Noah Smith pushes back hard on that claim, arguing that “Berkeley’s influence goes beyond the standard impact of a high-ranking economics department.”
As someone who earned his M.A. in economics from Stanford University and go to hear Ken Arrow lecture on the history of economic thought for a semester, I clearly think they’re both wrong. That’s not the point of this little diatribe, however. In an aside, Smith notes the following:
In the field of macroeconomics — econ’s glamour division and the public face of the profession — Berkeley has a few heavy hitters, such as David Romer, a pioneer of New Keynesian business cycle theory, which has become the dominant theory in policy-making circles. It also has Maurice Obstfeld, the director of the International Monetary Fund’s research division (emphasis added).
No disrespect to Romer and Obstfeld, but as an outsider can I just point out how problematic it is that macroeconomics should be thought of as the “glamour division”?
I see what Smith is saying here — macroeconomists like Larry Summers or Robert Barro or Kenneth Rogoff get a lot of press coverage when talking about the business cycle or monetary policy or fiscal policy or whatnot.
The problem is that as a subfield of inquiry, macroeconomics might be the least developed branch of the field. All of the other branches of economics — economic history, the myriad strands of microeconomics — can rely upon a vastly greater array of data. Macroeconomics, on the other hand, essentially has had about 70 years of postwar economic data to play with. That’s not a lot. The result is that macroeconomists have proven to be God-awful predictors of the business cycle. The press coverage is an unfortunate vindication of Alan Blinder’s decades-old hypothesis that everyone else will listen to economists the most on precisely the issues where there is the least consensus — and the most crackpot theories will get the most attention.
I write this as someone who works in the equivalent subfield in political science. International relations has much less data to work with than comparative politics or American politics. IR scholars, like macroeconomists, are severely limited in their ability to run experiments. Despite the efforts of some, IR scholars probably have the deepest paradigmatic divides in the discipline. And despite all that, damn if foreign policy mooseheads don’t command a decent amount of press attention.
So, to sum up: economics would be better off as a field if macroeconomists weren’t the face of the discipline.