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09/09/2020

Comments

Jackie Tamez

Krugman’s piece provided thought-provoking ideas that challenge the academia norms for economics, particularly regarding modeling and its effectiveness. Although models can provide a general framework that we can apply to a wide variety of case studies, it is crucial to acknowledge that because they are somewhat vague and theoretical principles, they may be flawed and certainly not applicable to every single scenario. I definitely agree with his argument and am glad that our own ECON 280 class actively points this out as we learn new information and discusses the nuances of models’ shortcomings. One quote that stood out to me was: “Model-building, especially in its early stages, involves the evolution of ignorance as well as knowledge; and someone with powerful intuition, with a deep sense of the complexities of reality, may well feel that from his point of view more is lost than is gained. It is in this honorable camp that I would put Albert Hirschman and his rejection of mainstream economics.” While it is remarkable that some models created many years ago are still applicable today, there should be a constant questioning and updating of these models. Relating this back to previous readings, it would be interesting to see more models incorporating Sen’s capabilities approach, although I can see how that would be difficult to quantify. Hirschman and Myrdal were icons (!) ahead of their time for saying that theorists and policy-makers “could and should ignore the pressures to produce buttoned-down, mathematically consistent analyses, and adopt instead a sort of muscular pragmatism in grappling with the problem of development” (which makes lots of sense).

Hayden Ludt

This paper is a lot different than the other papers we have read so far this semester. I like how it takes a more historical approach to Development Economics and compares the theories used from mid 1900's to current theory. He mentions how economies seemed to follow economic theory for about 10-15 years before the theory would no longer be able to accurately describe what was being seen in the real world.
One of the most startling parts of this paper was the introduction of the fact that models and economic modeling was introduced in the middle of the 20th century. Since econ 100 I have been learning simple models such as basic supply and demand, all the way to more complete for-ex models and IS-LM.
He then goes into the complications of creating an accurate model. And discusses the problems of trying to keep up with the actual real world and there is inevitably some lag between theory and actual world experiences.

carrie morrison

I found Krugman's arguments about how models can be limiting very interesting. Models seem to be the basis for most of economic theory and are rather simplified to include a couple variables. I had never considered much how these are a basis rather than the rule. A quote that stuck out to me was "be aware that your models are maps rather than reality". It is easy to get caught up in the simplicity and ignore outside variables, limiting the development of models and theory. Something else I found interesting was how models were what created a barrier for the growth of development theory but also in the end a simple model helped revive it. It makes me wonder if there are models today where the growth is limited because of the lack of "daring to be silly".

GrahamJameson

In this article, Krugman gave both an interesting and insightful overview of the history of development economics and discussed the difficulties of economic models. For one, I didn’t understand the complicated past of development economics and the struggle for development economists in the 40s and 50s to provide tested models for their literature. Second, as many other people have mentioned, I have always had trouble fully accepting the economic models I’ve run into during my time at W&L, and it was interesting to read Krugman’s take on economic modeling. What stood out to me was that a model is “a good model if it succeeds in explaining or rationalizing some of what you see in the world in a way that you might not have expected.” It doesn’t have to be the most complex model ever created within your scope of research, it doesn’t have to take any particular form, but it is constrained by your modeling technique and ability. The Fultz dishpan model particularly stood out to me because it was very simple, but was able to provide important insights into the behavior of weather systems. It’s setup did not resemble the actual structure of the earth or get into specifics, but it still was very valuable. The problem is, in economics and other social sciences, the idea of simplifying complex systems is often restricted by the accepted techniques.

Eric Schleicher

In this article, Krugman speaks often about the difficulties of tackling complex issues and systems in economic models and thinking, but I feel like this paper in itself exemplifies the inherent complexities of economic issues. I think Krugman pretty well demonstrates the breadth of economics and how wide-ranging its applications can be, of course with a focus on the historical works of development economists and some of his perceived shortcomings of their lack of formal models accompanying their thinking. I understand Krugman's general conclusions about the importance of models and how they are often necessary in his opinion to back economic ideas and concepts. Though, as many of us students have personal experience with, the reliance on formal models can be distracting from the actual concepts they are representing. I agree with Krugman that it is important to have models to create consistency in teaching and passing down economic information, but I think it is especially important when educating young economists to first have the conversations and dialogue that the models represent. I know from my experience that I have on occasion learned certain complex economic models, only to understand what they fully represent after I learned the functionality of the model itself. I think Krugman is of course aware of the necessity to have these conversations and not immediately jump to formal applications, as he explains with his personal critiques of formal economic models. I think especially in these times, as the world, and in particular issues related to economic development, continues to grow and become increasingly interconnected, it is even more important to develop a strong theoretical framework before converting theories into models. In fact, there is more opportunity for experimentation and investment than ever before. One question I had while reading this article, after observing Krugman's review of Rosenstein Rodan's shoe factory example for developing nations. There is much talk about these theoretical frameworks, but how much legitimate action or investment has occurred to validate the Big Push theory or other traditional theories of economic development, including the High Development Theory? I think there is more opportunity to test certain theories of development with hopefully few negative externalities, given the amount of money and wealth currently distributed throughout the world's developed nations.

Savannah Corey

I found Krugman’s explanation of the assets and limitations of economic models very captivating. I agree with Krugman that having formal models as a basis for economic studies is necessary to convey simplified stories, as Professor Casey calls them, that allow us to observe economic behavior. I found his inclusion of “Fultz’s dish-pan” analogy very insightful, highlighting that economic models simplify the complexities of the stories they are telling in a comprehensive way. Moreover, it is definitely crucial that we hold ourselves accountable to realize that models do not reflect a completely accurate reality, therefore we must not “sleepwalkers” and actively evaluate all of the consequences. Likewise, his clarification on the high development theory and the big push were very informative. This shed a light on poverty trapped countries, reminding me our reading from last Friday, “Institutional Barriers and World Income Disparities,” where many poor agrarian societies suffered from lack of access to enough capital to invest in advanced technologies for enrichment. The idea of a positive feedback loop leading to self-sustainment and growth is very fascinating, yet I wonder what government policies would instigate poverty trapped countries into a positive feedback loop, how these programs would be financed, and how long this would take?

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