Monday, October 05, 2009

Kocherlakota Praises Macro, Leaves

Not two weeks after penning a stirring defense of macroeconomics, archetypal macroeconomist Narayana Kocherlakota packs it up to be an administrator (I blogged on his post here, but Kocherlakota has strangely removed his remarks from his homepage). Actually, he is President of the Minneapolis Fed, but given their narrow mandate this job does not require much strategic savvy. Your daily planner merely has your 4-dimensional coordinates for a speech, which must include 3% new material, and the instruction "don't say anything stupid!" Unfortunately, the Nash equilibrium to this game is to say nothing interesting.

Revealed preference is very, well, revealing. If you are studying physics in the early twentieth century they can't pay you to leave. If you are in the equivalent of the Peace Studies department, and you can get a cushy job making banal statements about current events on the rubber chicken circuit, the choice is obvious.


Noah said...

Plenty of early-20th-century physicists left pure research to work on government engineering projects (e.g. Oppenheimer, Teller).

But be that as it may, Kocherlakota is an old guy who is, let's face it, not going to do much in the way of revolutionary research. It would be more interesting to look at whether grad students at top universities are moving into or out of macro.

At my university (University of Michigan, not a "top" school but no slouch either), macro - especially behavioral macro and financial macro - is the hot new thing for grad students, thanks to the crisis.

Anonymous said...

I second Noah, graduates in econ are opting for Macro in continental Europe in very high proportions. Btw the first-job market for econ grades is healthy in W.EU so there's more than opportunity cost at work.

But What do I Know? said...

@ Noah

Great! More scholastics. How many angels can dance on the head of that multiplier?