About two weeks ago, Kartik Athreya, a researcher for the Federal Reserve Bank of Richmond, posted a diatribe about the difficulties in performing macroeconomic research and policy. Titled “Economics is Hard. Don't Let Bloggers Tell You Otherwise,” it seemed to be an academic rant. It provoked a firestorm of criticism from the blogosphere.
Stung by myriad criticisms of the Fed, Athreya attempted to defend the priesthood of economics. “Writers who have not taken a year of PhD coursework in a decent economics department (and passed their PhD qualifying exams), cannot meaningfully advance the discussion on economic policy,” he wrote.
That is a valid point — economics is to important to leave to just anyone. Even economists.
Towards that end, and to further illuminate our discussion, I suggest the following questions be used for all economic PhD candidates in their qualifying exams:
"¢ True or False: Humans act to obtain the highest possible well-being for themselves given available information about opportunities and other constraints, both natural and institutional, on their ability to achieve predetermined goals. -Explain your answer in real world practice, rather than theoretical, terms.
"¢ Starting in 2001, the FOMC started a monetary accommodation that took rates to the lowest levels in over 40 years, and then kept them there for 3 years. Discuss the economic and market impact of these rates. Include commodities, residential real estate, and financial derivatives in your answer.
"¢ Almost the entirety of the economics profession missed the 2008 recession, the worst in many decades, in advance. Why?
"¢ Nobel Laureate Joseph Stiglitz wrote: “The Chicago School [of economics] bears the blame for providing a seeming intellectual foundation for the idea that markets are self- adjusting and the best role for government is to do nothing." Discuss the intellectual errors of The Chicago School, from Milton Friedman forwards. - For Booth School of Business PhD candidates ONLY: Why is the rest of the world wrong, and your belief system correct?
"¢ Federal Reserve economists prefer to focus on "core inflation," excluding food and energy. What is the basis of this exclusion? What impact does it have on Fed polciy? What might it mean for policymakers?
"¢ Joan Robinson of Cambridge University: "The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists." What did she mean by this?
"¢ Please identify the 3 non-science fields in the following list:
-Nonlinear Wave Dynamics -Wimmins studies -Quantum Physics -Bioinformatics and Proteomics -Economics -General Relativity -Design and Fabrication of Microelectromechanical Devices -18th Century English Poetry -String Theory
"¢ In 2007, the Fed Chairman stated that subprime mortgages were contained. What was the analytical basis of this statement? Why was it wrong? What impact did it have?
"¢ John Kenneth Galbraith: "We have 2 classes of forecasters: Those who don't know"¦ and those who don't know they don't know." Please explain what Galbraith's statement means in the context of Wall Street economists.
"¢ In 1997, the Boskin Commission claimed that inflation was overstated by 1.1%. Changes to how CPI was calculated (Substitution, Hedonics) were made. How did these changes affect subsequent Federal Reserve Policy? What was their impact on actual — not BLS measured — inflation?
"¢ A Federal Reserve researcher recently wrote: "I still feel ill at ease with my grasp of many issues, and I am fairly confident that this is not just a question of limited intellect." How would you explain the Dunning"“Kruger effect to this person? What does Dunning-Kruger mean in practical terms to the work of economists?
"¢ Statistician George Box said, "Remember that all models are wrong; the practical question is how wrong do they have to be to not be useful." Discuss.
Final question:
"¢ Why do you want a PhD in economics? What do you plan on doing for a living?
Please put your written answers here, including all relevant citations and sources.
Incidentally, the title is a play on the infamous last words of Sir Donald Wolfit: “Dying is easy, comedy is hard.”
BR, your questions are interesting. But since you’re not a qualified economist then you are not qualified to make meaningful criticism of the profession. You should leave the analysis of economic events to experts, since only experts can even understand the actual concepts. This is hard shit, after all. You’re not qualified. Piss off.
Just who the hell do you think you are? Alan Greenspan?
Barry, you made my day!
Thanks.
dead hobo by your logic, only doctors are”qualified to make meaningful criticism of the profession” only bankers arequalified to make meaningful criticism of their profession The sad thing is that many profesionals only think they are qualified to comment on their own profession
-SNIP-
~~~
BR: Yes, he was being sarcastic . . .
Their are several purposes or goals in achieving a Phd.
1. It is a pre-requisite to teaching. On one hand, it insures that the candidate is familiar with school politics, grading, and teaching since that is how most of his doctorate study time was spend. On the other hand, it insures a restricted pool of employables, allowing existing Doc’s to demand higher wages and better conditions.
2. It is a genuine vehicle for the advancement of knowledge. Funding of doctorate studies allows otherwise impecunious geniuses to develop new ideas which may benefit mankind.
3. It keeps smart people who are incapable of dealing with the real world out of our hair for an additional three to six years. Ultimately, they will stay in academia, allowing the rest of us to get on with real job of oursourcing jobs, ripping off investors, and blowing up brown and tan people in foreign lands.
I am a victim of reason #1. After 20 years of commodity trading, I am being told I cannot teach full-time because I don’t have a PhD, while courses in commodity investing are taught by people who have never sweated a squeeze on Brent or carried brown bags of cash to the Third World. Well, ceteris paribus and on a frictionless plane, my real-life experience is meaningless.
Here’s a conundrum. According to Fed researchers, only those who graduate from a decent doctoral program should be allowed to contemplate economics in a professional manner. Dr Greenspan led the Fed for several terms and is the acknowledged architect of out current good fortune. Yet his NYU dissertation appeared to be a kludge.
Per Barrons:
Dr. Greenspan’s Amazing Invisible Thesis
By JIM MCTAGUE
http://online.barrons.com/article/SB120675340444773623.html
Exactly how Greenspan wrapped up his NYU studies in such a short period is unclear, but it appears that his thesis wasn’t especially time-consuming. Auerbach cites an earlier biography that says that Greenspan submitted — instead of a normal Ph.D. dissertation — some papers totaling 176 pages that he entitled Papers on Economic Theory and Policy. Among them was at least one he’d written earlier. ————————————————————————————-
Thus, is Dr Greenspan an example of educational excellence or, by the researcher’s own analysis, was Dr Greenspan an unqualified poser who lucked into his dream job?
Barry You outdid yourself!! Great stuff… b
BR: keep it up, and the Psychologists will use their pseudo-science to have a net thrown over you and declare your eccentric but rational observations of reality a threat to society. Of course, they will send you a bill.
“Why do you want a PhD in economics? What do you plan on doing for a living?”
I’m not surprise by this statement. Have you ever considered that it may just be for personal satisfaction and not just money or to “earn a living”? I like history and I know I won’t make a living out of it. Should that stop me from going to school to learn more of it? Having said that I agree that Fed Reserve people are idiots and the fact that they write this is that they know they are losing their propaganda war….
Greenspan… Boskin… Chicago School… I see a pattern here.
…and not a sewing pattern, which unless I could re-contextualize Betsy Ross simulacra, disqualifies me from saying anything of value about Wimmin.
gosh, I would have failed big time, took me too long to figure out what Wimmins Studies was…
Having worked with some genuine numbnuts who outrank me in Economics education ‘on paper’, I know what people mean when they refer to “Piled Higher and Deeper”.
That said, Athreya’s basic argument does have some validity to it. There are suddenly a lot of people with almost no Economics background who want to pop off about how to run shit. The vast majority of them are more interested in finding some economic arguement that jives with their political view than by a genuine belief/interest in some Macroeconomic theory.
The answers are: True, True, False, True, True, False, False, False, True, False, True, False and False.
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