Sometime ago I remember reading a study that indicated the way that publications from Chicago trained economists clustered in the Journal of Political Economy and those from Harvard, in the Quarterly Journal of Economics. (Maybe someone recalls the reference.)
I recently came upon an article about the respective hiring patterns of departments of economics, comparative literature, of mathematics. A similar type of clustering occurs in economics, but far more modestly in mathematics, where presumably ideology would not play much of a role.
Economists commonly describe the ideological clustering is a division between freshwater and saltwater economists -- because the conservative departments tend to be in the interior and the more liberal along the East and West coasts.
The author does not attribute the clustering to ideological influences, but one might suspect a reluctance of Chicago to dilute its ideological purity with an excessive influx of people who do Harvard or MIT style economics. Admittedly, the difference between these schools is much more modest than it has been in the past.
If one can accept the possibility of mutual discrimination on account of relatively modest intellectual differences, might one be forgiven for suspecting the long-denied discrimination against radical economists?
Are economic clusters as dangerous as cluster bombs? Like just watching Fox or MSNBC?
Worse than that. I recall a joke about a military parade. Amidst the caravan of heavy equipment, there was a convertible with 5 dumpy middle aged men. A spectator wondered what such people were doing in a military parade. His friend explained, "They are economists. You don't know how much damage they can do."
Having known quite a few, mostly mainstream, non-American economists, my impression was that they were contemptously dismissive of the stuff comming out of Chicago. Even in the US it seems not many first-rate economists outside of freshwater schools are enamoured of Chicago style macro.
So one would have expected this clustering and insularity to have caused Chicago to become increasingly irrelevant. Yet this has not happened. Clearly Chicago economists have had far more influence than their intellectual contribution to the subject should have warranted.
To summarize, one possible benefit of clustering could have been that it led to the weeding out of the intellectually insolvent. But obviously that has not happened. So the clustering in US academic econ depts is almost certainly a symptom of a deeper malaise plaguing the discipline.
btw that joke on the dangers of economists, as I remember it, went this way:
The last Mayday parade in the Soviet Union. After the tanks and the troops and the planes and the missiles rolled by there came ten men dressed in black.
"Are they Spies?" Asked Gorby.
"They are economists," replies the KGB director, "imagine the havoc they will wreak when we set them loose on the Americans"
Chicago pizzas have thick crusts. Perhaps Chicago economists have thin ones.
M.P. is definitely right about the clustering. The clusters of more clearly heterodox remain under attack (e.g. Notre Dame), even as both of the mainstream streams (water, fresh or salty), are looking pretty pathetic.
So, I just heard one of my more mainstream macro colleagues present a paper on "the two views," which indeed are the two one finds in macro textbooks, a supposedly "classical" one and a supposedly "Keynesian" one. The former is pure Chicago, and he identified it with allowing for flexible prices, which then are supposedly instantly always going to general equilibrium to clear all markets, including presumably labor at full employment. The other, really a "New Keynesian" view (see Mankiw), allows for "sticky prices," which is supposedly why we are able to have involuntary unemployment (that is why Mankiw named his dog, "Keynes").
I will give my colleague credit that he found something fishy and dissatisfying about all this, that somehow what is going on now most certainly does not fit the freshwater story, but that somehow it does not seem like sticky prices explain it either. This allowed me to point out that indeed there are models that do not appear in the textbooks in which flexible prices actually make the system less stable, and the recent episodes of speculative bubbles that have crashed and brought down financial markets and a whole lot else, fit the bill all to well, not to mention all the nasty sorts of nonlinear dynamics that can go on while those flexible prices go winging and zinging all over the place while not necessarily getting to that sacred equilibrium point.
Oh, and regarding that joke about the military parade, the version I heard (which did involve the old Soviet Union) had them being from GOSPLAN and carrying briefcases.
Clustering might work from both the demand side and the supply side. Economists at a department might want to hire applicants like themselves; and applicants might want to work with colleagues like themselves.
One of the reasons might be that it is easier to evaluate the quality of an applicant who is following the same sort of approach.
There's been a lot of fuss about diversity by race and sex. Intellectual diversity matters far more (in a university at least, but possibly elsewhere too).
When I heard the story, the economists were shabbily dressed, not in smart uniforms like the others. And shuffling along, unable to march in time.
"One of the reasons might be that it is easier to evaluate the quality of an applicant who is following the same sort of approach."
Easier is not quite the word we generally use to describe the satisfaction of reviewing and rating that which we are already convinced of.
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