Econ grad students and the Macro Wars

In the blog world, there's been some argument as to what the younger generation really thinks about the whole "Macro Wars" thing. Do up-and-coming econ grad students think that the current paradigm needs to be revamped? Do they think macro is basically doing fine? It's tough to tell, because - understandably - most grad students are afraid to get into these academic-political fights (obviously I was one exception, but I'm crazy). But when grad students can speak their minds without fear of consequences, we can see that there is a lot of angst out there over the state of macro - and even over the value of macro itself.

I'm talking, of course, about Econ Job Market Rumors, the anonymous forum. Of course you don't have to be an econ grad student to post at EJMR, but it's hard to imagine that many other people would be interested in the economics job market. If you've ever read EJMR, you'll know that no punches are pulled.

So here's a pretty well-known thread in which the EJMR folks dish their opinions about macro. (The title, "macro no giod p", is an inside-joke meme; I'll let you figure out the meaning for yourself.) A large fraction of the commenters are very critical of the macro field in general, for example:

It's interesting that the fact that their models don't fit does not bother macro economists that much. Whenever a "good" model fails empirically, they just call that a paradox and write hundreds of papers about it.

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I feel depressed explaining to my friends what I learned in PhD macro . I'm sure most lay people interested in macro would be reallllyyyy disappointed by what is taught and published. But don't fret! You can shrug it off. Just like the students who turn away from macro, lay people too can be dismissed as not sophisticated enough to truly understand the insights of RBCs.

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[T]he best explanation you [macroeconomists] can come up for business cycles is either 'people are lazy' or a 'negative technology shock'. 

Macro = ideological crap and everything which challenges that view (like ABM) are told that they do not have 'microfoundations' and that's why they are crap. 

Of course, as long as macroeconomists do make the correct predictions they can claim they have the correct explanations, because assumptions do not matter. Oh wait, you even fail on this part. 

To sum it up: Macroeconomists don't know anything about human behavior, how markets work or something about the economy.

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The biggest puzzle is actually that macroeconomists are so proud about their 'microfoundations' yet they do not understand them at all.

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I can't wait for the day where econ departments split and leave macro behind, much like physical anthropologists sometimes leave cultural anthropologists behind in their own little circle jerk departments.

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macro too corrupt
too much black-box
not enough predictive success
too wrong too often

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macro = ideological bulls**t, should be removed from economics.

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Oh quit your bellyaching...Nobody likes macroeconomics unless they're a macreconomist. You still have to take it. It's the rite of passage. Just pass your prelim and never look back like the rest of us did. 

A small handful of people in the thread show up to defend macro, but their defenses tend to be very circumspect:

In real life though I find the people who usually make macro no good comments have little to no exposure to modern macro yet have a pretty strong opinion. Its one thing to critique a subject with an understanding of it, then there is a room for intelligent debate. It is anotherthing to dismiss the subject 

Even if you don't like the approach in current macro, macro has difficult questions that are worth asking and answering. Being stupid enough to voice allowed an opinion that macro shouldn't be studied at all means you aren't fit to be an economist. It shames me that some of you are Ph.D's or Ph.D candidates. 

It seems that some of you haven't ever intelligently thought about why the lay person seems to barely realize that there are other fields in economics other than macroeconomics. It is the economics they see as most relevant to them. They do not care about novelty/usefulness of an approach. They care about whether what you have to say is relevant to their understanding of the world, and if it impacts them or those around them. Macroeconomics of fields has the most visible impact on ordinary people and which is why it is a field worth studying.

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Now you probably learned nothing in substance in a conventional macro-course. You worked through a few seminal papers most of which were written in the 80s and mid 90s (King, Rebelo, Kydland Prescott, gali 1999). You might have looked at Solow 1956 for good measure and some other growth papers from 1970s. The point of that curriculum is to learn the existing approach to dynamic economics. Something you spend little to know time in studying in your mathematics economics courses or first year micro-theory courses. That approach in general can go a long way to explain phenomena around us, even the current crisis. 

You can criticize the approach, but one needs to understand that simply stating the approach is no good isn't any sort of substantive critique. Its unfortunate that few outside of the field have been able to give a real substantive critique, beyond that calibration is wonky and you don't like exogenous shocks. I think most of us realize calibration is wonky, except maybe Prescott. The point of the modern approach is to endogenize as many variables as possible, as that was even more prevalent in the past. (This is really why we ought to teach IS-LM, in grad classes.)

And then a number of people seem to accept that macro field has severe limitations, but still insist that the field is worth studying:

When macro is the subfield with the highest demand for economists, second only to metics? What are you going to do then? Micro theory? 

What you guys don't realize is that in the eyes of the public macro IS economics (and vice versa). Let go of macro and just see enrolment fade and your salaries plummet.

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Yes. Perhaps that precisely is the problem. The public wants us to do things we aren't very confident with. I must admit, I don't think I would have started in econ if macro wasn't a part of it.

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I admit macro is no good, but maybe that is why macro is precisely the best subfield for us, since so many questions still lie ahead. What more can we really do in econometrics?

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I am a macroeconomist too. I decided to work in this area partly because I am interested in the questions, and partly because it is clearly a field where the social marginal product is potentially very high.

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no one thinks macroeconomics we are doing is that robust. There wouldn't be disagreement in the first place. Its because we lack tools to do good causal inference in the first place. Its nice you can use cross-sectional data or panel data and come-up with an identification strategy as outlined in mostly harmless econometrics. 

We on the other hand have about 4 business cycles worth of auto-correlated time-series data to do most of our inference on. What ever empirical tools are only fit to answer a narrow range of questions. That is why the a toybox economy like DSGE model can catch on in the first place.

(These last two probably best sum up my own views on the topic. Macro has very poor data to work with, and this means we should lower our expectations for the field to some degree; at the same time, the lack of real progress in the field leaves it wide open for innovative thinkers to make a big difference.)

Anyway, I was somewhat surprised at the depth of animosity towards macro among the grad student community. Not only were the anti-macro posts far more numerous, but they received far more likes than dislikes. The same pattern seems to hold elsewhere on EJMR. Non-macro students tend to be very disparaging of macro, and macro students tend to express deep misgivings and reservations about their chosen field. There are, of course, exceptions. But despite a couple retorts of "micro no giod p", there doesn't seem to be nearly the same amount of skepticism directed toward the various micro fields.

I'm not sure what conclusions we can generalize from these anonymous forum posts, or whether EJMR is an accurate barometer of econ grad student sentiment. But the criticism of macro nevertheless was eye-opening, even to a macro-skeptic blogger like myself.


Update: A commenter points me to this thread, where EJMR denizens debate the value of structural estimation. Not really related, but also fun.