Wednesday, 15 October 2008

Winning prizes

Official recognition is always nice. Prizes, medals and the like might ultimately be rather shallow, but it can serve a purpose. Many more people are likely to read a literary novel such as White Tiger because it won the Booker prize.

And this week I’ve been looking more closely at the academic work of Paul Krugman, following his win this year of the Nobel Memorial Prize in Economic Sciences (not a Nobel Prize!). Though I’ve read his columns frequently, and like his mix of policy wonkery and partisan attacks on right-wing myths, I’ve never really encountered his academic work. It’s not bad.

Here’s a good piece about the man, putting him in context. Krugman, it says, is "the first of the 1970s/1980s MIT/Harvard crowd--a group that includes such familiar-to-noneconomists names as Larry Summers, Ben Bernanke, Frederic Mishkin, Greg Mankiw and Glenn Hubbard--to win a Nobel."

It goes on to say that these economists are characterised by their non-ideological stances, while Krugman is well known for his little models, rejecting the grander theories of some of his predecessors. It reminds me of my ideas about how economics and politics can be explained best by using a toolbox of theories and models, rather than a grand masterplan that links up everything. However, and as Krugman has found out, having lots of little stories makes a grand narrative difficult, as well as specific policy proposals.

Krugman is undoubtedly a clever guy. Here’s a readable essay by him about economics. Specifically, it’s about why even smart people makes basic mistakes about economics, often preferring complex and difficult models so as to ‘disprove’ simple and provable ones. It rings very true and might explain some of the popularity of anti-economics industry writers such as Taleb.

Links

Mark to market accounting eased

A strong defence of hedge funds and the issue discussed by Peston.

The road to hell is paved with good intentions. Melanie Phillips started out on the Left, grew disaffected, grew to hate the Left to the point of mania, and now writes pitiful slime like this.

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