Links to Consider, 10/8

Roger Farmer on Leijonhuvfud's Macro; Rob Henderson on elite revolutionaries; Peter Diamandis on artificial wombs; Patrick Collison and Ezra Klein on impediments to progress

Roger Farmer writes,

In the late 1960s and early 1970s, Axel’s star shone brightly. But it was eclipsed by the publication in 1972 of Robert Lucas’s work on rational expectations. Almost overnight, the economic paradigm shifted, and the idea of disequilibrium macroeconomics and “involuntary unemployment” was banished from the lexicon of respectable discussion. Lucas argued that markets, including the labour market, are always in equilibrium and an entire decade of work was consigned to the dustbin of history (Farmer 2010).

The magnitude of this intellectual volte face is difficult to convey to anyone who did not live through it.

I lived through it. My economics career began as a bet on the disequilibrium macroeconomics of Clower, Leijonhufvud, Malinvaud and Barro-Grossman against the rational expectations school of Lucas, Sargent, and Fischer. That choice turned out to be the academic equivalent of taking a dive into an empty swimming pool. Pointer from Tyler Cowen.

Farmer concludes,

In Axel’s view, modern macroeconomics is a degenerative research programme that took a wrong turn in the 1950s. In my opinion, Axel was right about this. Time will tell if the profession will eventually agree.

Rob Henderson writes,

Most of us vastly underestimate how much status games between elites determine what happens in the world.

He invokes Peter Turchin and "elite over-production.”

Peter Diamandis writes,

can you imagine giving birth to a baby without an egg and a sperm, while using an artificial womb?

A stunning new breakthrough moves us closer to what an answer might look like.

If true, it should alter the demographic outlook.

The Podcast Browser has Ezra Klein’s conversation with Patrick Collison. I recommend the last half hour, starting about one hour in. They discuss institutional impediments to progress. Collison points to some evidence for massive inefficiencies in resource allocation in science. A survey he conducted found that most scientists would work on different projects if they had their choice. And they spend inordinate amounts of time applying for and administering grants. It seems as though we pay a huge price for the centralization and bureaucratization of scientific research.

Klein makes the point that talent flows to where people feel that they can make a difference. Someone with the know-how and ambition to build high-speed rail wants to build a rail line, not spend years fighting NIMBYs.