tag:blogger.com,1999:blog-4900303239154048192.post7669568761851699612..comments2024-03-06T06:34:42.881-05:00Comments on EconoSpeak: And It Ain't Shinola...Unknownnoreply@blogger.comBlogger20125tag:blogger.com,1999:blog-4900303239154048192.post-86072041780696136262009-09-03T18:36:49.687-04:002009-09-03T18:36:49.687-04:00So it seems to be generally agreed to by a group o...So it seems to be generally agreed to by a group of well versed economists that there is, in their profession, a source of disinformation so egregious as to generate suspiscion regarding the intent of the author. Ohanian is certainly not the only source of such disinformation, but his effort seems to be outstanding in its lack of scientific rigor and his simple ignorance of basic historical facts. <br /><br />What's going on? This guy is not a quack. He holds a PhD from a respectable university, Rochester.<br />He's listed as a consultant on the Minneapolis Federal Reserve Bank web site. He's a professor at UCLA, no podunk itself. So where's the filter mechanism for Economics as a field of science? How do I, a layman with an interest in the results, know woh is worth listening to? Better yet,<br />how does the media know how to judge if they had an intention to judge the quality of what they're being told? Frankly, given the influence of the field on our economy, and as a result on our lives, this seems unacceptable. The greatest danger to our democracy is the lack of candor in our media. With "professionals" like Ohanian available for comment any lie can be established as a reasonable assumption, nearly a fact. Really an unacceptable circumstance.Jackhttps://www.blogger.com/profile/12971442888151627894noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-25688947055583753832009-09-03T17:33:15.030-04:002009-09-03T17:33:15.030-04:00The Ohanian paper has a number of serious problems...The Ohanian paper has a number of serious problems with it, starting with its discussion of historical facts. Yes, Hoover made some of the moves described, but they had little impact. Nominal wages fell, if not as much as did prices, but then prices fell much further in the supposedly wonderful 1920-21 recession. Unions were almost non-existent and virtually powerless, until after FDR's Wagner Act in 1935. He is conjuring a ludicrous boogeyman.<br /><br />Furthermore, if this sort of thing was the source of the problems, why did the economy turn around when FDR came in who gave much more power to unions and engaged in far more '"monopolistic" practices than did Hoover? This whole shell game of trying to "Rooseveltize" Hoover is hilarious.<br /><br />Regarding the model for Mr. Better Informed, or whatever he is calling himself, its biggest problem is assuming equilibrium, indeed, rational expectations equilibrium, in the midst of a massive disequilibrium situation. He also does not model that nominal debts were fixed, meaning their real burden rose as nominal wages fell, something even Milton Friedman pointed out as being a problem of the period.<br /><br />All in all, the paper is a piece of trash that has gotten way too much tub thumping by various people who have not thought it through very carefully or do not know what they are talking about.rosserjb@jmu.eduhttps://www.blogger.com/profile/09300046915843554101noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-86590501381597455562009-09-03T12:28:37.010-04:002009-09-03T12:28:37.010-04:00What concerns me more so than Ohanian's appare...What concerns me more so than Ohanian's apparently flawed analysis and resulting erroneous conclusions is that he can hide his peculiar professional product flaws behind a weighty set of titles. He holds a full professorship at UCLA and is also the "Director" of a privately funded sub-chapter of UCLA's Economics Dept,the Robert Ettinger <br />Family Program in MacroEconomic Research. Pretty impressive, sounding that is, and how is the public and the press to know any better? This is something akin to taking legal advise from John Yoo regarding the interrogation of prisoners because he holds a professorial position at Berkley. How does it happen?<br /><br />I would usually suggest that one follows the money when it comes to peculiar research findings and analysis. The same holds true in regards to faculty positions or "scholar/associate" positions at a so-called think tank. ChicagoBooth is a good example of money in academia. Check out the Council on Chicago Booth. It reads like a who's who of corporate America with a significant investment banker representation. The express purpose of such a Council, as stated on their site is to "advise Booth's leadership in their efforts to maintain faculty excellence." The Ettinger Family Program in Macroeconomic Research is not so illuminating in regards to influence on faculty selection.Jackhttps://www.blogger.com/profile/12971442888151627894noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-53160323202742492072009-09-03T09:36:49.389-04:002009-09-03T09:36:49.389-04:00Lets stick to the model. I love it. Lets stick t...Lets stick to the model. I love it. Lets stick to my model and not get involved in all those pesky facts. You will soon see that my model supports my model if you use my math. Don't go back to the original data though that always leads to confusion. This guys hilarious.callitwhatitisAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-84689410094416025292009-09-02T11:48:24.821-04:002009-09-02T11:48:24.821-04:00Question for "just some code"?
There ar...Question for "just some code"?<br /><br />There are at least 3 versions of Dynare: Gauss, Scilab, and Matlab.<br /><br />since you did not specify the version you used, I wonder if using one of the other versions, the result will be steady shinola or the variable shinola squared to the omega factor of pi?<br /><br />But to digress back to Sandwichman's post: It appears that Ohanian cited evidence to support his theory that clearly does not. <br /><br />Factors that were also suspect to result in lowered productivity, were cited by Lanoie, et al to be the increased work day: 8 to 9 hours, a lack of preparation for the schedule change for either workers or managers. <br /><br />Ohanian cited "evidence" that does not support his conclusion. Without real evidence or a plausible explanation, I conclude that Ohanian was simply offering his unsubstantiated opinion and masquerading it as fact. <br /><br /><br />Tom, are you implying that "a vast mass" can not be made to mean the same thing as "little"<br /><br />All a professor has to do is apply a little* "E.I.T." ( Enhanced Interpretation Techniques )<br /><br />Arguably more (or less) humane than the other EIT (Enhanced Interrogation Techniques)<br />we only torture language. <br /><br />*or a vast mass of EIT.The Big Mookhttps://www.blogger.com/profile/14275789156621632522noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-35065139777053112742009-09-02T10:59:54.561-04:002009-09-02T10:59:54.561-04:00"Me again" said,
"let's stick..."Me again" said, <br /><br />"let's stick to the model"<br /><br />Your point, then, is that what Ohanian says in ordinary prose doesn't count? Here, again is what he said, "because Hoover's wage maintenance and work-sharing program reduces steady state hours and capital stocks." What part of "because" am I misinterpreting?<br /><br />Model... shmodel. If it is true that the model <i>doesn't</i> show what Ohanian claims it shows... then the model is irrelevant. Null and void. The model itself may be a piece of cake. Has nothing to do, though, with Ohanian's argument and the press release trumpeting his conclusions.<br /><br />You say that objecting to the model's assumptions as unrealistic, just plain wrong and silly and to the model as not the right one to think about the issues are all valid criticisms. Thank you very much. That is what I thought I was doing in the post. I didn't say that "capital stock only fails because of the footnote." Professor Ohanian said that (see the two extended quotes above). Go argue with him. <br /><br />But, please, please, please, stick around for part two. I want to see how you riddle your way out of this conundrum:<br /><br />"...little empirical work has been done to measure the consequences of work sharing." -- Lanoie, Raymond and Shearer, "Work sharing and productivity: Evidence<br />from firm level data." 2001.<br /><br /><br />"...a <a href="http://books.google.ca/books?id=oDB_Tj05UkoC&dq=chris+nyland+management+of+production&printsec=frontcover&source=bl&ots=5sfc28s4Gg&sig=iEts9hsL63UW49SyWkTepn9q2zA&hl=en&ei=nYWeSoiOKYa0swOmqPUj&sa=X&oi=book_result&ct=result&resnum=1#v=onepage&q=%22vast%20mass%22&f=false" rel="nofollow">vast mass</a> of [empirical] research has been undertaken into how the relationship among effort, efficiency and time manifests itself within the production process." - Chris Nyland, <i>Reduced worktime and the management of production</i>. 1989.Sandwichmanhttps://www.blogger.com/profile/11159060882083015637noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-22544000190351264952009-09-02T09:04:25.933-04:002009-09-02T09:04:25.933-04:00By the way, in case you are interested in checking...By the way, in case you are interested in checking this out:<br /><br />Run the following code in Dynare.<br /><br />It is a simple growth model with monopolistic competition, where market power is controlled by 1/epsilon. If you reduce epsilon from 10 (a mark-upo f around 10%) to say, 8 (a mark-up of around 14%), capital in the steady state falls from 8.00425 to 7.48675, a reduction of around 6.5%. Again, note that in this simple model none of your concerns are present, and yet, the main result still goes through<br /><br />%----------------------------------------------------------------<br />% 1. Defining variables<br />%----------------------------------------------------------------<br /><br />var y c k i l y_l w r z;<br />varexo e;<br /><br />parameters beta psi delta alpha rho gamma sigma epsilon;<br /><br />%----------------------------------------------------------------<br />% 2. Calibration<br />%----------------------------------------------------------------<br /><br />alpha = 0.33;<br />beta = 0.99;<br />delta = 0.023;<br />psi = 1.75;<br />rho = 0.95; <br />sigma = (0.007/(1-alpha));<br />epsilon = 10;<br /><br />%----------------------------------------------------------------<br />% 3. Model<br />%----------------------------------------------------------------<br /><br />model;<br /> (1/c) = beta*(1/c(+1))*(1+r(+1)-delta);<br /> psi*c/(1-l) = w;<br /> c+i = y;<br /> y = (k(-1)^alpha)*(exp(z)*l)^(1-alpha);<br /> w = y*((epsilon-1)/epsilon)*(1-alpha)/l;<br /> r = y*((epsilon-1)/epsilon)*alpha/k(-1);<br /> i = k-(1-delta)*k(-1);<br /> y_l = y/l;<br /> z = rho*z(-1)+e;<br />end;<br /><br />%----------------------------------------------------------------<br />% 4. Computation<br />%----------------------------------------------------------------<br /><br />initval;<br /> k = 9;<br /> c = 0.76;<br /> l = 0.3;<br /> w = 2.07;<br /> r = 0.03;<br /> z = 0; <br /> e = 0;<br />end;<br /><br />shocks;<br />var e = sigma^2;<br />end;<br /><br />steady;Just some codenoreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-31198429851066808322009-09-02T07:26:31.726-04:002009-09-02T07:26:31.726-04:00You still did not answer the main point of my comm...You still did not answer the main point of my comment: in a model such as Ohanian's, a raise in market power reduces capital stock in the new steady state EVEN when workweek and TFP are constant. Having a changing workweek only increases the effect a little bit quantitatively.<br />You may not like the model: you may think that their assumptions are unrealistic or just plain wrong and silly, you may think is not the right model to think about the issues. All those are valid criticism. What you cannot do is claim as you do in your post that capital stock only fails because of the footnote you refer to. This is just not true and it denotes a deep misunderstanding of how a modern DSGE model works.<br />Again, we are just talking about a property of the model.<br />Let's stick to the modelMe againnoreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-39250258410744895672009-09-02T02:03:58.337-04:002009-09-02T02:03:58.337-04:00Nice try, "better-informed"-reader,
Ho...Nice try, "better-informed"-reader, <br /><br />How on earth do you come up with the inference that the Sandwichman confuses capital inputs with capital stock? Just makin' shit up, eh? Get cornered? Throw mud!<br /><br />Funny thing is, there was a zinger I <i>could</i> have used if I wasn't concerned to be scrupulous about the difference between stocks and inputs. <br /><br /><i>Lanoie et al.</i> themselves appear to (possibly) confuse the two and I was tempted to quote them in "contradiction" to Ohanian's argument. But I could only have done that by either 1. pulling a fast one on my readers (assuming they wouldn't notice the difference) or 2. going into a long, boring explanatory digression that would have been pedantic and mystifying. <br /><br />But since you brought the matter up (you brave anonymous know-it-all, you), here's the cite from Lanoie et. al., that I didn't use specifically because I <i>didn't</i> confuse capital stocks and capital utilization:<br /><br />"It is implicitly assumed that productivity is not a function of the capital stock (building, equipment, material, etc.) since discussions with the company's officials showed that, in the context of this study, it was constant throughout the period." (p. 1213)<br /><br />So in the above quote do they mean capital stock was constant or capital input was constant? Gosh, you're the "better informed" one. Maybe you can tell me. <br /><br />Meanwhile, I'll leave you with a <a href="http://delong.typepad.com/sdj/2009/04/union-strength-unemployment-and-the-great-depression.html?cid=6a00e551f08003883401156ffc2d7b970b#comment-6a00e551f08003883401156ffc2d7b970b" rel="nofollow">fine comment</a> from Brad DeLong's blog in response to an earlier discussion of an equally funky Ohanian fantasy:<br /><br />"One of the central methods of economics as a discipline involves assuming your conclusion. The task of the theorist is then to conceal the conclusion somewhere in the paper where reviewers will either miss it or fail to understand its significance - kind of like the 'Find 6 Differences' comics that appear in your local newspaper. It makes logic easy, and fun!" <br /><br />The commentator, "memory", left out the part about when your reviewer does find how you've assumed the conclusion, accuse him of "uttermost lack of familiarity with modern macroeconomics." I'm sure Bernie Madoff accused his critics of uttermost lack of familiarity with modern finance. You don't have to be an expert in modern macroeconomics to smell a bald-faced fraud.<br /><br />But please, please stick around, "better-informed-reader"! I want to get your views on my response to the part II declaration by Lanoie, et al. (Ohanian's <i>only</i> source on the key issue of work-sharing) that "little empirical work has been done to measure the consequences of work sharing."Sandwichmanhttps://www.blogger.com/profile/11159060882083015637noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-72964499443730436852009-09-01T23:21:43.049-04:002009-09-01T23:21:43.049-04:00Dear Sir:
Your comments on Ohanian's paper on...Dear Sir:<br /><br />Your comments on Ohanian's paper only reveal your uttermost lack of familiarity with modern macroeconomics. <br /><br />You are confusing a reduction in capital stock (the point made by Ohanian) with a reduction in capital services input. Capital services inputs are, in the model, equal to capital stock scaled by workweek. In a model such as this one, the increase in market power reduces capital stocks in the new balanced growth path because we have higher mark-ups that work in the same way that a tax on inputs.<br />Even in the absence of varying capital utilization, we will have exactly the same reduction that Ohanian mentions but only slightly smaller in quantitative terms. <br />All this is well know to first year graduate students if they want to pass their quals and it is not really even worthwhile to mention it. Obviously, neither you nor the previous readers seem to be able to understand this. Instead you offer a egregiously childish reading of the footnote.<br /><br />So, please, before throwing darts in the future, do your homework.A better informed readernoreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-22286717105207610952009-09-01T12:16:23.383-04:002009-09-01T12:16:23.383-04:00Yes!
Ohanian is a prime candidate to experience th...Yes!<br />Ohanian is a prime candidate to experience the tender mercies of a netless meritocratic free market -- which is to say he is a strong argument against tenure.<br />--mlMartin Langelandhttps://www.blogger.com/profile/12214277415738344944noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-54614665087193187942009-09-01T09:53:59.452-04:002009-09-01T09:53:59.452-04:00Yes
Doyle SaylorYes<br />Doyle SaylorAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-44255057814667654932009-09-01T02:39:42.257-04:002009-09-01T02:39:42.257-04:00affirmativeaffirmativeAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-75208915664787498832009-09-01T01:00:39.061-04:002009-09-01T01:00:39.061-04:00yesyesAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-12373298772263677332009-09-01T00:08:57.634-04:002009-09-01T00:08:57.634-04:00Maybe Mr. Ohanian's been practicing Canadian-s...Maybe Mr. Ohanian's been practicing Canadian-style work sharing. It would seem that his 9th hour productivity is in the toilet.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-10656315318838978002009-09-01T00:03:53.743-04:002009-09-01T00:03:53.743-04:00Yes! Thanks for this! This guy is with NBER? De...Yes! Thanks for this! This guy is with NBER? Dean Baker, send this guy back to the Cato Institute where he belongs. Next he'll be saying we all need to deregulate banking and ... oh, we did that, guess that didn't work out so well either.John S. Clinehttps://www.blogger.com/profile/01926850967801484573noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-72939422325673458482009-08-31T23:57:53.160-04:002009-08-31T23:57:53.160-04:00In reference to people who just didn't get it,...In reference to people who just didn't get it, my mother used to say "he doesn't know shit from shinola". I hadn't seen this clip before -- it's great!marycolleenhttps://www.blogger.com/profile/01053403194949559877noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-38824676644065474482009-08-31T22:32:08.199-04:002009-08-31T22:32:08.199-04:00He definitely made a mistake with "Such a the...He definitely made a mistake with "Such a theory has been elusive because the Depression is so much larger than any other downturn...", when it should have read "Such a theory has been elusive because the Depression is so much larger than any other downturn before now..." Because this recession is not incorporating innovative work sharing solutions it has the capacity to dwarf anything seen before. Most likely some future scholar of questionable intellect will claim it was not a two front war, sub-prime mortgages, deregulation, credit default swaps, or just plain old greed that caused the depression of the late 2000's. Instead in his questionable wisdom he will point to health-care reform, infrastructure improvement, and any possible work sharing that is to arise as the "real" problems. Do these guys get paid to teach? We can see why the university trained economists are doing such a good job.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-22223332333685752292009-08-31T22:20:47.919-04:002009-08-31T22:20:47.919-04:00yesyesBernadettehttps://www.blogger.com/profile/17607068457721451503noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-78834166664235755622009-08-31T22:17:40.736-04:002009-08-31T22:17:40.736-04:00Yes!
Note: Shinola is no longer being produced. ...Yes!<br /><br />Note: Shinola is no longer being produced. Not the case, obviously, with the paired substance.Caroline Abbottnoreply@blogger.com