Ed Leamer on Macroeconomic Patterns and Stories

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🗓️ 4 May 2009

⏱️ 66 minutes

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Summary

Ed Leamer, of UCLA and author of Macroeconomic Patterns and Stories, talks with EconTalk host Russ Roberts about how we should use patterns in macroeconomic data and stories about those patterns to improve our understanding of the economy. Leamer argues that economics is not a science, but rather a way of thinking, and that economic models are neither true nor false, but either useful or not useful. He discusses various patterns in the recessions and recoveries in the United States since 1950. The conversation closes with a discussion of the reliability of econometric analysis.

Transcript

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0:00.0	Welcome to Econ Talk, part of the Library of Economics and Liberty. I'm your host Russ Roberts
0:13.9	of George Mason University and Stanford University's Hoover Institution. Our website is econtalk.org
0:21.2	where you can subscribe, find other episodes, comment on this podcast, and find links to
0:26.5	another information related to today's conversation. Our email address is mailadicontalk.org. We'd
0:33.6	love to hear from you. Today is April 23rd, 2009, and my guest is Ed Lemer, the Sean
0:42.8	C.J. Medbury Chair in Management and Professor in Economics and Statistics at UCLA. His latest
0:49.1	book is Macroeconomic Patterns and Stories, a guide for MBAs, which is our subject for today's
0:55.5	podcast. Ed, welcome back to Econ Talk. It's great to be invited again. The subtitle for your book,
1:01.4	a guide for MBAs is a little misleading. It's really a guide for anyone interested in getting an
1:06.2	idea of what we know about Macroeconomic data. It's a remarkable book. There's nothing else quite
1:11.4	like it out there, at least that I've seen, and it's an in-depth and entertaining look, which is
1:17.0	quite a feat, at numbers, patterns, and as you say in the title stories. There's also another subtitle
1:23.3	of sorts on the front page, front cover, a little quotation of sorts. It says, we are pattern-seeking,
1:29.8	storytelling animals, and I'd like you to talk about what you mean by that, and how you got that
1:35.8	on the cover. Was that easy or a piece of cake or hard? Did the publisher give you any trouble on that?
1:42.6	No, the publisher, I think, sets a key idea of the book, so they were happy to put it on there.
1:48.6	There's a picture on the cover as well of somebody looking through binoculars and seeing a
1:54.8	pattern, and a father sitting there reading a story to his probably son. The story is once there
2:02.6	was a country ruled by a powerful market. I thought that was great. That's the story telling
2:08.8	that economists have emphasized to a larger sense of the invisible hand as a story.
2:14.0	In a very compelling story, but I'm trying to emphasize the need to do pattern-seeking more.
2:19.1	In the words are, I think, very appropriate because most economists think of theory and evidence.
	...

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