Have Economic Debates Changed Since 1977?

I recently happened upon one of George Stigler‘s humorous asides in the 1977 Journal of Political Economy — “The Conference Handbook.” In order to make discussions of research papers more efficient, Stigler suggested that one should simply interrupt the speaker by shouting the numbered objection, rather than the usual, overly long interjection. And as a public service, he gave a list of the objections one typically encounters:

1. Adam Smith said that.
2. Unfortunately, there is an identification problem which is not dealt with adequately in the paper.
3. The residuals are clearly non-normal, and the specification of the model is incorrect.
4. Theorizing is not fruitful at this stage; we need a series of case studies.
5. Case studies are a clue, but no real progress can be made until a model of the process is constructed.
6. The second-best consideration would, of course, vitiate the argument.
7. That is an index number problem (obs., except in Cambridge).
8. Have you tried two-stage least squares?
9. The conclusions change if you introduce uncertainty.
10. You didn’t use probit analysis?
11. I proved the main results in a paper published years ago.
12. The analysis is marred by a failure to distinguish transitory and permanent components.
13. The market cannot, of course, deal satisfactorily with that externality.
14. But what if transaction costs are not zero?
15. That follows from the Coase Theorem.
16. Of course, if you allow for the investment in human capital, the entire picture changes.
17. Of course, the demand function is quite inelastic.
18. Of course, the supply function is highly inelastic.
19. The author uses a sledgehammer to crack a peanut.
20. What empirical finding would contradict your theory?
21. The central argument is not only a tautology, it is false.
22. What happens when you extend the analysis to the later (or earlier) period?
23. The motivation of the agents in this theory is so narrowly egotistic that it cannot possibly explain the behavior of real people.
24. The flabby economic actor in this impressionistic model should be replaced by the utility-maximizing individual.
25. Did you have any trouble in inverting the singular matrix?
26. It is unfortunate that the wrong choice was made between M1 and M2.
27. That is alright in theory, but it doesn’t work out in practice (use sparingly).
28. The speaker apparently believes that there is still one free lunch.
29. The problem cannot be dealt with by partial equilibrium methods; it requires a general equilibrium formulation.
30. The paper is rigidly confined by the paradigm of neoclassical economics, so large parts of urgent reality are outside its comprehension.
31. The conclusion rests on the assumption of fixed tastes, but (of course) tastes have surely changed.
32. The trouble with the present situation is that the property rights have not been fully assigned.

The list is hilarious [Ed. note: particularly if you are an economist; if not, perhaps not so much].

But there’s a more subtle point being made here: There is so much agreement within economics about valid inference that Stigler’s list comes close to characterizing (and caricaturing) “a large share of the comments elicited in most conferences.”

Perhaps this suggests a methodological narrowness to neoclassical economics. But equally, it is the clarity of the framework that gives economic analysis its power. (Feel free to insert joke here about two-handed economists; although recognize that even an octopus couldn’t summarize the consensus within, say, sociology.)

But the thing that truly struck me about Stigler’s list is how well it has aged since 1977. Is it really the case that economics has advanced so little that 30 years later we are still having the same old debates?

If not, what other conference comments do you think should be added to the 2008 edition?


Joshua Gans

One for today: "How would this change if agents were hyperbolic discounters?"

Donna Calhoun

Or how about the French inversion of #27 : "Sure it works in practice, but does it work in theory?"

Donna, Paris

Char

33. You need to account for a structural break in 1979 (note: may substitute 1973 in some contexts).

Jamus

One could argue that point 2 on the identification problem is pretty much a concern about endogeneity (or even more common today, raising a question about the exclusion restriction). Which itself speaks to how we still continue to mull over the very same problems, except clothed in slightly different language.

Dave

Is there a weak instruments problem?

Jacob

Not sure how often this is heard, but it should be:

33. But what if the actors aren't rational?

Scott

Experiments conducted by Kahnmen and Tversky have clearly demonstrated that people do NOT choose rationally under those conditions.

KB

Amazing how many of these comments I heard at a conference earlier this month. Although, I'd be willing to take out

10. You didn't use probit analysis?
29. The problem cannot be dealt with by partial equilibrium methods; it requires a general equilibrium formulation.

And substitute in

Did you try using a Difference-in-Difference technique?

Did you try using a non-parametric estimation?

For behavioral studies only I'd recommend the following: I am fascinated with your pictures and knowledge of the brain, but isn't it a leap from your lab to real life situations? The people in your study are different from all other people, plus, the sample is small.

Curt Sampson

Are you kidding? You're up to thirty-two? Heck, in mathematics (a much older--no, I take that back--in academia a much older discipline), we're only up to about seventeen. Or perhaps we're just more economical in our expression.

cjs@cynic.net

DRDR

At Fed banks, certainly one of the items for this list would be, "How is this of any relevance to monetary policy?"

I think one huge difference from 1977 is the popularity of randomized trials and field work in development economics, and that has lead to a whole new list of commonly-raised issues.

a student of Economics

The results are driven by unobserved heterogeneity.

Citizens

"What about citizen participation?!?"

Geoff, Ohio

My friends and I use this system for retelling favorite jokes. Oh, wait! You just did!

Peter

Missing is the favorite: "How did you handle endogeneity problem?"

Vanessa

-You just ran a bunch of regressions.

-What have we learned from your analysis?

gp

I did not truly understand economics until I started using it after graduation (especially econometrics). I would ask that more econ professors consider teaching basic Bayesian stats and introduce simulation methods. Most of your students will be engaged in work that involves the valuation of stuff (or the cash flows from them). Most of the time closed form solutions do not exist. Why don't you guys teach students how to fit distributions and engage in simulation. Perhaps even use excel along with SAS/SPSS. It would be both interesting, and useful. Your students would also be of considerably greater value on the job market.

Valuethinker

'In an efficient market, that type of arbitrage isn't possible'.

'70 years of data really isn't statistically significant'.

George

In the popular TV show "Numbers," after a man was killed on the trails of a garden, the resident mathematical genius said, "Have you tried PATH analysis?"

jayvee

Here's another one:

Didn't those guys cover it in the book "Freakonomics"?

Valuethinker

'What if we assume production has zero marginal cost?'.

'I think it's an externality problem that hasn't been properly endogenized'.

'But what if we view this as a 2-stage game?'.

'But the exchange rate movement negates the conclusion'.

32- Donna - that was attributed to the Prime Minister of Ireland at the time, who was an economist

'Doesn't the work of the Chicago School discredit this result?'

'Aren't you implicitly assuming rational expectations?'

'Richard Easterlin was writing about this in the 1950s, but he couldn't get his work published'

'That's normative economics, not positive economics'