Econbrowser

Dear Professor Chinn,

It's a debatable question how much the ASSA sessions are rigorous, and how much they are just presentations to the choir and marking out turf. Last year (not this one), I was at the ASSA meetings (in Denver), and attended one of the sessions that discussed multipliers and macroeconomic behavior in China. The presenter for the multipliers paper argued that relevant evidence for multipliers must be that they are very low, since in one case, for Germany, his results were that they were 0.2. In poking around in his presentation, it turned out that those data were heavily influenced by the late 1980s, when West Germany absorbed East Germany to become the unified German republic. The money the West Germans paid to absorb East German debt was counted as government spending. I asked for a sensitivity analysis, along the lines of Chatterjee and Hadi, to see how much difference it would make, and the presenter was totally unimpressed and surely has not done it. So the Cato Foundation and the like are well-financed and do not need to stake out professional claims, while others do, but not necessarily in argument that goes the last mile in rigor, and that may explain the difference.

Seach for ASSA on Google, and up pops the AEA website with....hmmm...Paul Krugman pictured in the center.

On the other hand, the ASSA Conference looks pretty interesting. Very diverse set of topics and presenters. Overall, the conferences seems seem pretty clueless about oil and the economy, although Barkley Rosser appears to have spoken on energy sustainability, and he's clearly aware of everything Jim has posted here and probably a fair smattering of my comments. Having said that, were I presenting, I'd probably do a paper entitled something like "A Series of Oil Shocks" or "Energy and Economic Growth". Nothing on shales either in the program. These are very important to the economy and central to, say, China's energy outlook. We now have a nice in-house forecast for US shale gas production; and indeed, for China's shale gas production.

In any event, let me concede your point. The ASSA Conference looks like great fun, with a wide range of offerings, no doubt from the obscure and impenetrable to the sublime. I would think it well worth the trip, even if one worked at Heritage.

Let me fill in the conclusion:
The good guys go to the ASSA, the bad guys do not

Interesting - it appears that CATO, Manhattan, and Heritage may be the least establishment and the least brainwashed of all the think tanks.

This basically confirms the obvious. CATO, Manhattan, and Heritage "researchers" are a bunch of hacks.

Steven Kopits,

Here is Mark Skousen's take on AEA for what it is worth. It appears that the only non-mercantilist presentation was the panel with Bob Mundell, Bob Zoellick, and Gary Becker (yes, I know that Larry Summers was also on the panel but they needed the comic relief.) It appears to be just another holiday for demand side economists to tell one another that their failed policies just need a little more time and a little more "stimulus."

I have to say that the picture on the home page of AEA may be the best thing there. How appropriate to have Paul Krugman front and center with a caption: "Participants at the 2012 Comedy Session." I am still laughing.

http://www.aeaweb.org/Annual_Meeting/

Sorry, Here is the link to Mark Skousen's report

http://www.mskousen.com/2012/01/free-market-economists-on-the-defensive-at-aea-meeting-in-chicago/

From Mark Skousen:

"Usually the Cato Institute has a booth at the AEA meetings, but not this year. However, I did see Liberty Fund and the Ayn Rand Institute there."

Ahem.

Julian Silk: Everything is relative. But I have two observations. First, one seldom oes a robustness test on-demand at a conference presentation, when the presenter typically has 20 minutes. Second, you are extrapolating on one observation? Having had experience in both worlds, I think averages are the relevant thing.

Steven Kopits: (6:41AM) Gee, I bumped into Lutz Kilian at the conference, and he was on the program; is he in your "clueless" category. Anyway, this is what I mean by dangers of analysis by anecdote.

Ricardo: Re your comment (7:01 AM):

Interesting - it appears that CATO, Manhattan, and Heritage may be the least establishment and the least brainwashed of all the think tanks.

I think you are right! Yes, I tremble to think how the American Engineering Association has brainwashed the engineers of America into worrying about tensile strength, calculus, statistics, and all those quantitative aspects you dismiss.

Ricardo (12:18PM): Is that the same Mark Skousen who has published with Regnery Press?

Steven Kopits: (2:52PM) Please note I was tabulating individuals on the preliminary program. Anybody can buy a booth at the ASSA.

Seems like a big "appeal to authority" argument to me. One would think that academic economists of the most rigorous and prestigious ilk have covered themselves in glory of late.

Almost none of the conclusions people are drawing follow from Prof. Chinn's data. The truth or falsity of a viewpoint certainly doesn't hinge on whether it is represented at AEA.

I am a free-market advocate, and regularly attend the AEA/ASSA (including the Continuing Ed. courses, great stuff). I've not felt unwelcome or under fire there. If one chooses sessions sensibly (and avoids the crappier of the ASSA sessions), they are generally rigorous and very informative, whether one agrees with the perspective or not.

Here's the thing that rings true to me about Menzie Chinn's point - how many George Masonites were there? For all their claims to be pioneers revolutionizing economics, the "New Vienna," and all that, they are strangely missing in action...all preening for their GMU mutual admiration society at APEE, I guess.

Finally, Mark Skousen (whom I know) was mistaken; I don't think there was any special fire directed at free market thought this year. And the CATO booth was there as usual. BTW, no one should give Skousen a bad time; he has his own idiosyncratic viewpoints, but is a nice guy willing to consider anyone's views and treat them decently. Treat him with similar respect, even if you disagree with him.

One other point re Cato: MC is using presence at the AEA/ASSA as an indicator of rigor of economic research. Cato is not specifically an economic think tank, but a policy tank. They promote libertarian viewpoints on drug wars, civil liberties, foreign policy, etc. that don't have a great deal to do with economic research and policy. I'm a donor to them, but not because I think they are doing groundbreaking economic research, and I don't think that's their raison d'etre. Mostly they don't seem to claim otherwise. (Mostly.)

Don: Good point. I was going to a dentist tomorrow for a new crown, but why pay extra for that credential of DDS. I think I'll look for somebody on the street instead.

Charles N. Steele (7:52PM): I am certain that Dr. Skousen is a perfectly intelligent, amiable person. I was citing Regnery Publishing as an indicator of distance from mainstream.

Charles N. Steele (8:06PM): I noted this link as some indication that Cato was involved in economic policy "research". In addition, the one time I visited Cato, the talk was on economics, so I thought that they were involved in economic research as well as general libertarian advocacy.

Menzie,

The same Mark Skousen who holds a sold out FreedomFest of over 2,500 participants every summer in Las Vegas. You should check out the list of Keynote speakers, then browse the other speakers. You may not recognize a lot of the names because many actually run successful businesses. Your favorite whipping boy, Don Luskin, will be there.

You're missing the RAND Corporation (maybe you don't consider it a think tank?), which had 3 participants in ASSA 2012, and a whopping 8 participants in ASSA 2011. This would mean RAND would have 5.5 average participants -- more than any other think tank you list.

Since these replies are coming from so many "thinkers" in the tank, I struggle with a question that some of you may weigh in on. For the general piblic, TIME magazine just ran a story with Warren Buffet's "short order position on economic policy". His positions are opposite most Republican views. Are the "thinkers" equally divided? Are many thinkers just thinking what they are told by their backers? As a scientist, I understand global warming and almost all scientists agree that CO2 creates a greenhouse effect. Is Warren mostly right--no lowering of corp tax, possible oil tax, higher tax for higher income, for more, read the Time article.

Ricardo: The point is not that the people aren't famous -- I'm sure they are. The point is location near mainstream economics.

Eric: I consider RAND a think tank, but one that does projects for clients more so than the others. However, I am happy to revise the graphs. If you were to generate new ones, I would post them. Of coures, there are others I did not even search for which might be usefully included as well, and if you were to do a more comprehensive search, I would be much obliged.

Menzie: I may revise the tables later this week (now is not a great day to do so, with Wikipedia down), but I think at the very least the number of participants should be normalized to the number of academic employees each think tank has. This may be difficult in some instances, as I know some think tanks are merely mastheads and sources of grant funding, without permanent academic staff.

Eric: OK, look forward to it. By the way, ASSA2011 and ASSA2012 are online, so you can search those electronically, as long as you have a list of think tanks in mind.

I agree some sort of normalization would be nice; the problem is some are more economics-oriented than others. For instance, both Brookings and AEI cover security, foreign policy, social policy as well as economics, while CEPR and EPI are almost completely economics-oriented. So one might want to normalize by size of issue-area, for instance.

Menzie,

My point is that in today's climate of mainstream economic failure, "mainstream economic academic" may not be a label all would like to wear. I would dare say that more of the speakers at FreedomFest saw the 2008 crash and wrote about it than speakers at AEA.

Ricardo: And would Don Luskin be among those prognosticators?

Lutz is certainly a fine economist and nice guy to boot. He makes important contributions to the field of oil and the economy.

Now, Lutz argues a narrow point at the ASSA proceeding: macro news and oil prices.

But there are much bigger issues in play:

If we allow that US oil consumption is and will be in secular decline, then what is the impact on the economy? (On this topic, see my 2009 article, "Peak Oil Economics" or BP's "Energy Outlook to 2030", issued today, p. 22, col "OECD Declines", http://www.bp.com/liveassets/bp_internet/globalbp/STAGING/global_assets/downloads/O/2012_2030_energy_outlook_booklet.pdf).

Anon accused me two posts ago (and not without some justification) of playing loose with the concept of positive externalities. So I went back to check the numbers, and it looks to me--back of the envelope basis--that the multiplier for oil is on the order of 10-12 if oil is a binding constraint (and today it is). Thus, an additional barrel of oil has a positive externality equal to 9-11 times beyond its internalized value to the individual. Do I believe that? Not sure, but that's an absolutely critical number to peg down. And I would guess it's pretty high, and if it is, that should take center stage at the AEA meeting. Because then you end up arguing that growth is materially constrained without incremental oil; and that shale oil and gas are the difference between the US and Europe in the second half of last year. You'll start looking hard at the prospects for those shales (BP, p 84) and consider CNG and LNG for use as a transportation fuel (just the exercise I'm conducting for a client today). I'd expect to see presentations on those topics. And I might expect to see a presentation entitled, "Will Peak Oil Kill the Welfare State?" or "Are European Fuel Taxes Sustainable?" And further, one might expect to see a presentation about the difference between demand-constrained modeling, where you're solving primarily for volumes; and supply-constrained modeling, where you're solving primarily for prices with significant demand-side adjustment. (Most economists operate under the de facto assumption that supply is demand-determined, thus a supply-constrained model is alien to their mindset.) I didn't find any topics like these on the ASSA agenda.

So I stand by my statement. The AEA is largely uninformed about oil and the economy. Frankly, the profession as a whole remains heavily dependent on Jim's individual work. Once you start digging to see who knows about this topic, the road inevitably seems to take you back to him. I didn't see his name on the agenda at the ASSA meeting either.

Menzie,

Peterson is sort of an outlier. Most of the fellows that represented them are either well-published academics or well-known in policy circles. (Mussa, Reinhart, Gagnon).

It's interesting to note that Hall & Judd were identified as apart of the Hoover Institute.

Steven Kopits: Well, first, Lutz has another paper on the program which is more "real". Second, there is specialization - I suspect much of what you are searching for is at the International Association of Energy Economists, or Association of Environmental and Resource Economics. But we are far afield -- in terms of economics (micro, macro, int'l trade and finance), the question was how far these thinks tanks were from the mainstream (and note, I didn't tabulate RFF).

Lance: I did not tabulate persons with joint affiliation with a university, when the university appointment is the primary affiliation(e.g., Hall). But Judd would've counted as one individual for Hoover, had I tabulated the Hoover Institution.

Professor Chinn-

Regarding your use of "mainstream economics" as your polestar, I am reminded of a quote attributed to Gen. George Patton:

"If everyone is thinking alike, then somebody isn't thinking."

Heterdoxy does not guarantee truth, it may be the work of cranks. But there is a powerful impulse to be with the herd and invoking mainstream anything is just a way of dismissing arguments without any real effort. It's just an example of an ad hominem attack.

Happy New Year!

It's been so long that I forgot to identify myself.

Happy New Year!

Rich Berger: As I recall, ad hominem means personal. It is not a personal attack to say somebody has views different from others -- just as it would not be a personal attack to say a forecaster is high in the distribution. It would be a personal attack to say somebody is stupid and malevolent for being high in the distribution -- or far away from the mainstream. I did not make either of those claims.

Rather, I made an objective statement regarding presence at ASSA, combined with a conjecture about distance from mainstream.

Happy New Year!

From wikipedia

An ad hominem (Latin for "to the man" or "to the person"), short for argumentum ad hominem, is an attempt to negate the truth of a claim by pointing out a negative characteristic or belief of the person supporting it.

I think "not in the mainstream" meets the bill. I still like General Patton's view of the mainstream.

Rich Berger: I like the quote too. But let me be explicit -- I don't think being outside the mainstream is bad. Witness my 2005 Council on Foreign Relations special report on the twin deficits.

Menzie-

Fair enough. I also believe that to dissent effectively, you have to understand what you are dissenting from.

Not sure if that is grammatically correct, but you know what I mean.

One additional thought: I suspect the method used to count participants affiliations is flawed. My impression is that Brookings, say, has a staff of in house researchers who would list Brookings as their affiliation in the program. Institutions built on a different model, e.g. Cato, tend to have researchers whose primary positions are elsewhere. I'm familiar with people who have written for Cato & AEI who list their university affiliations when they present/attend.

I don't know the extent of this issue, but my impression is that it would have a big effect for Cato, some for Brookings,perhaps very little for Heritage... but it makes me quite suspicious of drawing any conclusion at all from thse data.

Charles N. Steele: Interesting and testable hypothesis. I checked the ASSA2012 agenda against the Cato experts list, and found the results unchanged.

Interesting, & thanks. So now I wonder if checking Brookings would show you've understated the case, and also what a multi-year analysis would show.

I think attendance may be an indicator of how seriously engaged one is. Whether it says anything about "location near mainstream" is doubtful, given the participation of URPE and some other heterodoxists.

Regardless, I think its a mistake for economists of any flavor to not participate in the meetings.

Charles N. Steele: As I know almost all the Brookings partiicpants at ASSA2012, the results should be unchanged there.