When He’s Right, He’s Right
Brad DeLong (via Mark Thoma, since my desktop is dead and I saw Mark’s post first):
I question Noah [Smith]’s description of the people as “brightest”. If you insist on trying to understand business cycles by requiring a single consumption Euler equation (rather than, say, risk-averse rich 70-somethings with short horizons; myopic middle-class 40-somethings, and the liquidity constrained); if you insist on trying to understand business cycles by requiring that firms engage in Calvo pricing; If you insist on trying to understand business cycles by requiring rational expectations (rather than anchored, adaptive, extrapolative, perfect-foresight, and Panglossian)–well, then you really aren’t very bright at all, are you?
Only two quibbles: Brad opens his piece by describing Noah as “smart young whippersnapper” and then eviscerates him. In Brad’s previous [immvho, failed] attempt at evisceration, Alex Seitz-Wald* was described as “a smart man.” So the quibbles are:
(1) What does Brad have against smart people?
ETA: This appears to be The DeLong Tell. He (correctly) praises “the very-sharp Tim Duy.” No reference to “smart” at all. If he were playing poker, this would be the equivalent of eating the Oreo.
(2) Alex is 29. I’m not certain of Noah’s age, but he (1) graduated undergraduate and spent three years in Japan and (2) received his Ph.D. in 2012 (four years ago). So my minimum guess for Noah would be:
graduated at 21 + 3 years in Japan + 3 years earning/finishing** Ph.D. + 4 years since then = 31.
And if you’re setting the morning line there, I’m taking the over.
So how is Noah a “smart young whippersnapper” and Alex a “smart man,” when the former is clearly a few years older than the latter?
*In the interest of full disclosure, I note that Alex married into my wife’s family this past Memorial Day. Also, in the interest of accuracy, I note that Brad is dead wrong in his framing of Alex’s piece. [That’s for another posting.] But, heck, even smart people like Brad make mistakes.
**This assumes some of the time in Japan was spent on work that directly contributed to completing his Ph.D. This seems an optimistic assumption.
A post about the use of the word “whippersnapper”?
Hey, enjoy it!
“Liquidity constrained”: oh; that’s what I am.
Yep. Join the group.
Then note that DSGE models assume that the Representative Agent is not liquidity constrained, and you’ll understand why no one in their right mind would consider Academic Macro to be Macro in anything but name,