politicartoons | (no subject)

After the poor have eaten the rich they will be full. The rich are an awfully big meal

The WSJ journal review (http://online.wsj.com/news/articles/SB10001424052702303825604579515452952131592) isn't that far from some of the Amazon reviews.

Reviewer Daniel Shuchman describes this painstakingly careful work as “less a work of economic analysis than a bizarre ideological screed.” He also suggests that Piketty’s argument that confiscatory tax rates won’t hurt growth is a groundless “breezy” assurance. In fact, Piketty’s argument is based on his rigorous econometric analysis of fifty years of data from eighteen OECD countries. Shuchman ends his review with a classic move straight out of the red-baiting playbook: “the professor ought to read ‘Animal Farm’ and ‘Darkness at Noon,’” he wrote. Awesome point!

Source: What Piketty’s Conservative Critics Get Wrong (http://thebaffler.com/blog/2014/04/what_pikettys_conservative_critics_get_wrong)

Edited 2014-06-03 22:36 (UTC)

It has been quite entertaining to see so many conservative 'experts' completely take for granted that Piketty is wrong. So-called libertarians endorsing plutocracy over an Animal Farm scenario really takes the cake though. Apparently Schuchman didn't read Animal Farm either...

Isn't it wild, people reviewing a book they've never read? E.g. Megan McArdle’s column for Bloomberg View.

I apologize in advance, because I am going to talk about a book that I have not yet read. To be clear, I intend to read Thomas Piketty’s “Capital in the Twenty-First Century.” It is sitting on my (virtual) bedside with a big stack of other (digital) books that I intend to read. But it’s far down in the queue, and I’m afraid that I can’t wait to weigh in—not on the book itself, but on its topic.

I've heard this book will likely win the Nobel prize for economics, due to the statistical work Piketty has done.

Edited 2014-06-03 23:19 (UTC)

If it does it will take a while. The Nobel in econ is still pretty backed up, both because there is a lot of important work (well at least that academics care about and how it shapes the thinking) but also because it often takes time to know the impact of a work. It would be amazing if Capital would get on the short list so soon, even if it did get consideration it probably would not win just due to tradition

So long as KL as a macro static is no longer taken for granted, they've done their job.

I don't understand what you're saying.

I'm saying that pedagogical simplifying assumptions, such as the Cobb-Douglas function(ie when K^n L^n=1), are detrimental to the field. Nobels in econ would be more substantial if such intuitions were done away with.

Maybe, but I don't think so. Cobb Douglas doesn't sum to one for pedagogical reasons, it does so for theoretical reasons. You would be hard pressed to come up with reasons for economies or diseconomies of scale in a macro context. Now CB production functions are often used because they're convenient but the scale economy parts are not.

I haven't read the book, but i do not think that Pikettys work relies on a production function which is not homogenous of order one. I would be surprised if he went in that direction because macro research had tried to go in that direction before (in the 80's when people were doing geographic/spacial examinations they ran into neededing macro level scale economies but could never find them or justify their existing*)

*IIRC: My knowledge of this comes from Krugman's "Development, Geography, and Economic Theory (Ohlin Lectures)" which is a short, accessible, and very interesting book/group of essays.

I wonder if any american politician ever had the courage to actually say, that they don't see any point in feeding people who cannot provide for themselves?

Like stock-traders? Health-insurance salesmen?

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What?