Tuesday, October 8, 2013

Ferguson on Krugtron

A fun show is breaking out. Niall Ferguson on "Krugtron the invincible."

Paul Krugman, for a while now, has been lambasting those he disagrees with by trumpeting their supposed "predictions" which came out wrong, and using words like "knaves and fools" to describe them -- when he's feeling polite. These claims often are based on a rather superficial, if any, study of what the people involved actually wrote, mirroring the sudden narcolepsy of Times fact-checkers any time Krugman steps in to the room. Niall has lately been a particular target of this calumnious campaign.

Niall's fighting back. "Oh yeah? Let's see how your "predictions" worked out!" Don't mess with a historian. He knows how to check the facts. This is only "part 1!" Ken Rogoff seems to be on a similar tear. (and a new item here.) This will be worth watching.

As regular blog readers know, I don't think science advances by evaluating soothsaying. You make good unconditional predictions with very badly wrong structural models, and very good structural models make bad unconditional predictions.  The talent of predicting and the talent of understanding are largely uncorrelated.  The judgmental forecasts of individuals are poor ways to evaluate any serious economic or scientific theory.  I carefully don't make "predictions" for just that reason. So, I don't regard this cheery deconstruction effort as a useful way to show that Krugman's "model," whatever it is, is wrong. I also can't see that anyone but the devoted choir of lemmings is paying much attention to Krugman's mudslinging any more.  But it is nice that Niall and Ken are taking the effort to ask the great doctor if perhaps he also doesn't need a bit of healing; perhaps they will force Krugman to go back to actually writing about economics. 

Update: Benn Steil Chimes in, this time on the Baltics, Iceland, and the supposed wonders of currency devaluation.