Warning: What follows is inside baseball, and oldster inside baseball at that. Unless you received a Ph.D. degree before 1990, you may find it hard to keep track of the players. Before delving into the details here, it might help to read a previous post that gives an overview. My sense of what went wrong in macro is based partly on what I observed as a Ph.D. student in the economics department at MIT during the 1977-78 and 1978-79 academic years.

Paul Krugman and I agree that something went very wrong in macroeconomics. This post (and a separate one that gives more of the historical details) continues a discussion (see here and here) about how things went so far off track and what we should learn from this episode. My claim is that the problems cannot be attributed solely to obstinacy on the part of Lucas and his supporters. They were making two points: (i) The existing multi-equation Keynesian models were fatally flawed.

In a previous post, I referred to Feynman Integrity as one possible guide to a life in science. An alternative is what I’ll call Stigler Conviction. This being the Internet, I’ll start with the smallest quote that conveys what Stigler conviction means. But because it helps to read this quote in context, at the end of this post, I’ll present a longer, unedited passage that contains it: Although … new economic theories are introduced by the technique of the huckster, I should add that they are not the work of mere hucksters.

In a previous post, I said that my claim about mathiness could be reduced to two assertions: Economist N did X. X is wrong because it undermines the scientific method. I reported that in conversations with economists I referred to loosely as freshwater sympathizers, I found agreement on 1 but disagreement on 2. Specifically, I heard two things: a) Yes, but everybody does X; that is how the adversarial method works.

You can boil my claim about mathiness down to two assertions: Economist ||N|| did ||X||. ||X|| is wrong because it undermines the scientific method. Claim 1 is a positive assertion, a statement about “what is …” Claim 2 is a normative assertion, a statement about “what ought …” As you would expect from an economist, the normative assertion in claim 2 is based on what I thought would be a shared premise: that the scientific method is a better way to determine what is true about economic activity than any alternative method, and that knowing what is true is valuable.