Keynesianism in the Great Recession

would love to hear suggestions for improvements.

You could add me as a co-author, for a start. The paper would be much better then, at least from my point of view.

More substantively, “the” is misspelled as “teh” on page 2, presumably because LaTex sucks. And I would (personally, and probably unsubstantiably) put more emphasis on the UK election result, particularly given that 2010 is the inflection point – this put the weight of the actual Treasury behind the Treasury View.

I think it’s well-known that Dan’s long-running sniping war against LaTeX is one of the few sweetly charming aspects of his otherwise terrible personality.

What is it about the government/household analogy that makes it so impervious to criticism, so ‘zombie-like’ if you will? Conservatives routinely say that governments, like households, cannot “live beyond their means”

Even the zombie lie is nonsensical; households routinely ‘live beyond their means’. To claim otherwise is to wish the entire credit card industry, house mortgages, student and car loans into non-existence.

It lives because it’s got an enduring, stolid trithiness to it. It SOUNDS like sage advice from your favorite grandpa, even if it is akin to wearing onions on your belt.

@9 ‘Live beyond their means’ in this context is a reference to governments spending more than they take in tax receipts – deficits. Government deficits can be sustained indefinitely because they create credit (in the account of the recipient of spending) and debt (the bond) and so just expand bank balance sheets and add to the money supply (resulting in either real GDP growth or inflation). As long as nominal GDP grows more than the deficit, the total government debt actually shrinks as a percentage of GDP.

If government debt is a purely internal matter of the nation, then, of course, there is no paradox, it’s just a matter of internal distribution. But when it’s combined with what looks like, in the case of the US, a permanent current account deficit, can that go on forever?

I’m also not a fan of the word “contestation”; I think it’s overused in academic writing. “Contention” is better. “Struggle” also sometimes works. There are other possibilities, I’m sure.

general explanations (independent of the quality of the arguments on the one side or the other) for the influence of different arguments at different times.

A possible explanation, sung to the tune of Bob Dylan’s “Like a Rolling Stone”.

Once upon a time you dressed so fine
You privatized Bolivia’s mines, didn’t you ?
You closed our schools, changed labor rules, called us fools
Austerity was your one and only tool.
You used to theorize
That debt should be prioritized
Now you don’t talk so loud
Now you don’t seem so proud
About having to be scrounging for your next deal.

How does it feel
How does it feel
A tanking economy
Decreasing GDP
No better than Haiti

Our @honbillenglish finance person uses the ‘our children and grandchildren’ phrase here in New Zealand. And more than one media pseudo economist has too. I think they manipulate people. But their listeners are not economists and don’t deserve to be mocked. Politicians and politics deliver voters to the people who pay the piper. This is a corrupt business.

Hence, if you have ready listeners, have caught the moment, can solve the problem, invoke an emotion, raise a threat etc. then you have the stage and you can deliver the listeners. You have a speech bubble at hand waiting to be filled.

English grasped a similar moment a while back, when Maori said that they owned the seabed and foreshaw, we’re backed up by the Waitangi Tribunal, and Pakeha were primed to listen. English said that Maori tribal ownership would prevent ordinary New Zealanders from a fundamental New Zealander identity-defining right of walking their dogs freely along the seashore. Most people did not know what the foreshaw was. At the time many believed him, but the reason why the believed him invoked some pretty longstanding emotional baggage between Maori and Pakeha. And believers did not want leaders who contradicted them. There were few personalities that successfully offered an alternative.

None of this kind of stuff involves recourse to fact or technical knowledge. And as with the attractiveness of the Tea Party for a while to some, tackling misinformation and successful emotional manipulation is impeded by mentioning facts. It’s a bit like the ‘I’m all right so you’re all right’ personal relationship failing. An emotional person caught up in a problem first needs to be engaged with as a person. They may be manipulated and oppressed, wrong, ignorant, angry, violent etc. but facts and ideas come later. And $trillions in debt is an emotional problem that many people felt deeply. They were also told that they were responsible for this debt. And that they needed the banks. That was a very difficult time to give people a basic lesson in macro economics. And it still is.

In case this is helpful:

http://mainlymacro.blogspot.com/2012/03/anti-keynesian-germany.html

Dsquared@1: The claim that Germany’s “actual fiscal policy was the most aggressive Keynesian stimulus of any developed nation” is far to strong. The most obvious way to quantify the size of fiscal stimulus would be to look for a spike in government spending as a fraction of GDP. (You might argue this is’nt a sufficient condition — if the GDP denominator falls quickly this ratio could increase quickly without government spending increasing at all — but surely it’s a necessary condition.) For Germany, from 2005 to 2010, that ratio goes like this: 47%, 45%, 43%, 44%, 48%, 47%. For the US in the same years, the ratio goes like this: 36%, 36%, 37%, 39%, 42%, 42%. It looks like fiscal stimulus in the US was bigger and applied longer. (These numbers are from the OECD statistics page http://stats.oecd.org/index.aspx.)

Jim Whitman @18: “And $trillions in debt is an emotional problem that many people felt deeply.And $trillions in debt is an emotional problem that many people felt deeply.”

They felt deeply about it when their party lost power, and not one second before. And we’ve seen this before, when a GOP administration left a financial mess to a Democratic administration.

fwiw, a use of the phrase “the great recession” to describe a much earlier period: Otto Eckstein, The Great Recession, with a postscript on stagflation (1978; based on lectures given in 1975)

David – am I missing something? Very prepared to be convinced otherwise on this one, but the numbers you outline have a jump of 4% in 2008 in Germany, and a jump of 3% in 2008 for the USA don’t they?

“Dissensus” is not a pretty word, but it does the job you want it to do–contrast with “consensus”–much more ably than “disagreement” or “difference” or the like. “Contestation” has an awkward look and a pedantic sound but, well, that kind of goes with the genre.

However, “self-ramifying” may be redundant.

Very interesting, thoughtful and well done.

A couple of things.

I’d like to see more evidence for the claim that Germany didn’t believe it would be badly affected by the 1st stage of the crisis. Quite a bit of the analysis at that time was focused on the adverse impact of the crisis on merchandise trade, indeed a quick search for “great trade collapse” will show lots of references to this aspect of the crisis. In addition, German policymakers may have been slow to realize it, but they were neck-deep in the financial side of the crisis as well — Hypo and the Landesbanken (which sounds like a good name for a band).

Second, one character perhaps deserving more prominence is Gordon Brown. He’s mentioned a couple of times but when one thinks back to how the stimulus process evolved in real time, it was quite UK-driven — remember Jamie Oliver cooking for the G20? Brown brought the connections to Oxbridge economics which was fairly stimulus-friendly and the G20 itself happened to be a good forum for this (vindicating Kevin Rudd’s early suggestion of this mechanism). But by 2010 Brown was gone and the austerians were now behind the wheel in the UK. The earlier dynamic of US/UK/China vs Germany broke down (for other reasons too of course).

As a follow-up, I’d suggest for another study on how madness can become consensus at least in high circles — how did it get to be beyond question in Brussels and Frankfurt (although not Washington) that countries must service in full the unsecured debts of their insolvent private commercial banks?

Hob (29) and mrearl (30): because they are tinpot neologisms. First, they are unnecessary – the English language already has words which are well understood and which convey the meaning. Second, using made-up words to substitute for existing words sounds like a trick for dressing up an unoriginal and pedestrian piece of prose as new, exciting and profound. There is an element of word-magic about it, like praying in Latin. The meaning could just as easily be conveyed in the vernacular, but a secret language known only to the priests is thrilling and magical. And thirdly, recourse to such methods devalues the authors’ whole field of study in the eyes of people of a good liberal education. You don’t want to sound like alchemists or astrologers, doing funny rites in long robes at midnight, do you?

We are witnessing the end of Keynesian economics, especially as practiced over the last 30 years. All of our growth has come from expansion of debt and it is not sustainable. Much of it was consumer debt earlier and we can see how that is being played out. Replacing consumer debt with government debt is not sustainable either and in fact we are seeing what too much debt does to various economies: Iceland, Dubai, Greece, Latvia, Hungary, Romania, Ireland, Portugal, Spain, Italy, England.
Japan is the real wildcard as their endgame will be with us within two years. Sure they can print and are but it will destroy their currency and their standard of living. There is no possible way for Japan to fund social security, medical care, etc. and continue to run their massive deficits. Holdings of government bonds are the wild card that has no value and is suppose to fund retirements, etc. Credit rating agencies are the deathknell for Keynesian government “stimulus”. You might get by for another year or two but you will witness big economies destroy their futures due to the recent borrowing.

And Mark – thanks for the link, which I hadn’t seen …

Tell me the facts that I have missed. Do you think Greece, Ireland, Portugal, Spain and Italy are having a good time? Debt is the problem and not the solution. Wait til you see Japan collapse and then you will realize how wrong you were. There is no magic bullet in being able to print your own money other than a different way of destroying the wealth of your citizens.

Again not having read the paper yet, I would suggest that real burning issue is not dissensus among economic experts but the discrediting of economic experts tout court among the general population. I would suggest that many people are now convinced that neo-liberal economists promoted a pernicious faith in free or unregulated markets that created such a catastrophe that people do not believe the Keynesian policies recommended by left liberal economists will do much good at a reasonable long-term cost.

The public does not seem to have much faith in economic expertise of any kind. It seems that more and more people are looking for insidious community solutions to the present economic malaise–that is, clamoring for the consolidation of a xenophobic and patriarchal moral order. Hence, Santorum’s unexpected success against the much better financed Romney who embodies a mixture of wealth and technocracy.

Dsquared @28: Actually, it’s from 2008 to 2009, and yes, in that one year government fraction of GDP went up by 4% in Germany and only 3% in the US. (The difference is actually 0.54% when one pulls in more decimal places.) Of course, in every single other year in the list the fraction went up by more in the US than in Germany, and in most of those years the fraction in Germany was actuall decreased while in the US it never fell even once, and after all five years the fraction in Germany ended where it started while in the US it was 6% higher. Oh, and I just managed to dig up 2011 numbers: in the US it rose by 0.1% while in Germany it fell by 0.9%. But if you believe that the only year in which fiscal stimulus counted was 2009, then I suppose Germany did more fiscal stimulus than the US.

Wright, of course in every one of those years the German government was spending 5-6% more than the US government in percentage of GDP and that didn’t stimulate anything.

As for TeX, it is a sickness of children and other control freaks whose mothers stopped them from becoming printers.

Alex Sinclair makes the perfect argument that Keynesian fiscal policy works.

“All of our growth has come from expansion of debt”

Now if we could just get politicians from the right (i.e. Reagan and GWB) to stop using Keynesian policies irresponsibly to spur their reelections and instead get our politicians to keep Keynesian fiscal policy in reserve for when it is truly needed due to failures of the private sector. Then we could have a consistently growing economy with fewer and smaller booms and busts.

I don’t understand the TeX hate. After using WYSIWYG editors, my discovery and learning of LaTeX was a huge breath of fresh air.

Single hyphens don’t work as dashes. It takes two, and without spaces.

“This,” with its untethered referent (“This has implications for how we think,” p. 44), is not only stylistically loose; it’s suggestive of loose thinking.

@7-10: BT is no doubt right when he says there is no analogy between household deficits and Government deficits, because “Government deficits can be sustained indefinitely because they create credit (in the account of the recipient of spending) and debt (the bond) and so just expand bank balance sheets and add to the money supply”.

There may be a problem here, though. In the stagflation years when things were happening to the UK economy that had been supposed impossible, a criticism of Keynsian economics was that, though Keynes was no doubt cleverer than anyone else, and enormously cleverer than average, he was not infinitely cleverer than average; and that the success of his policy of recovery through adding to the money supply and benefiting from inflation depended on most people being too stupid to understand what was happening. Which, sooner or later, they did.

I suspect that painful memories of inflationary periods are quite strong: and that when people are told “the Government cannot live beyond its means indefinitely” many of them think “the Government cannot live beyond its means unless it writes off its debts through inflation which will do me no good at all”.

Cue, perhaps, for skilled economists to argue that stagflation cannot happen again, and that anyway inflation that writes off debts is a Good Thing, and anyone who suffers from it is of no importance in the grand economic perspective.

I suspect that painful memories of inflationary periods are quite strong

…and recessionary ones?

That is “page 34 line 11”

Henry appreciated this and it seems we have some LaTeX users out there so I’ll post it publicly too. You don’t have to put up with hyperref’s crappy, crappy way of drawing hyperlinks!

\usepackage[colorlinks,urlcolor=blue,citecolor=blue,linkcolor=blue]{hyperref}

This line causes the link text to be colored instead of using those stupid boxes.

Also, snaildarter@52, Henry wants em-dashes, which are three hyphens in LaTeX. I think the tradition of not putting spaces around them is dumb. Two hypens in LaTeX is an en-dash, often used for numerical ranges. The Wikipedia article on dashes is quite helpful. (Well, it’s where I learned what I know, so maybe it’s all wrong and I just don’t know any better.)

Henry,
Kitcher is very interested in a democratizing science at many levels–the formation of research agendas, the certification of scientific knowledge as public knowledge, the dissemination of scientific results.
He is a pretty radical democrat. He even trusts an informed public to support basic research in, say, cosmology.

geo @ 61

I’d resolved to avoid commenting on this thread, no matter the temptation, but as with all well-meant resolutions, this one has proven difficult to keep.

Yes, Henry and John’s paper is intended for academics, and academics are more often than not compelled by the standards of their trade to call a spade a personal excavation tool. Nevertheless, I appreciate the subtleties they attempt even when they don’t achieve them. Over the years, I’ve learned a lot by not comparing them to Martin Luther, even though I’ve often wished they had Luther’s knack, dem Volk aufs Maul schauen.

When I look at who governs us, where they get the ideas they inflict on us, and the implications of both for the conflict between democracy and effective management of the complex systems which have come to define us, I look, as you do, at how power and rationality diverge, and why the processes involved in the divergence are so often hidden. By that standard of measurement, I, like you, find this paper as modest in its achievements as in its claims, but I also think that it makes a significant contribution to an understanding of just how those with power and those without it envision the dialectic in which they’re all enmeshed. These are the ostrich fans which are obligatory for anyone who wants to join the dance, and as such, should be looked at carefully, if not admired — even by those of us waiting in the audience for the moment of revelation.

@Dan Jordan Perhaps, I misunderstand Keynes, but didn’t he only prescribe fiscal policy when in a crisis, such as the depression? It doesn’t appear to me that fiscal policy would be “Keynesian” if used at other times. Though, as you say, results predicted by Keynes could occur.

The article looks incomplete without Richard Koo’s “balance sheet recession” concept providing theoretical grounds for applying the Keynesian stimulus in the current Recession.

Henry, no, that isn’t at all what I think. What I think is that you and John have put your finger on something valuable, in the sense that it attempts to describe the diffusion of ideas in a political/economic system that uses ideas both as a currency, in the sense that they buy access to power, and as an instrument — albeit often a blunt one — for wielding the power that is available in any particular situation.

This is something most laymen sense, but have difficulty quantifying without resorting to their resentments. As a matter of fact, I think those those resentments often get in the way of our insights, not to mention our attempts at a more robust analysis of what is to be done, just as you apparently do.

What I was trying to say, however imperfectly, is that academic papers, in the humanities and social sciences, anyway, can be useful even to laymen despite their specialized vocabulary, that their goals are appropriately modest, and that we shouldn’t expect them to be poetry. In terms of this specific paper, what interests me, as always, is the way the intersection of power, ideology and motive is described, and what the implications are for someone who has to live with the consequences no matter what the outcome of applied policy.

As a non-specialist, and someone with no power to speak of, I can see a terrifying gap between the needs of management and the needs of everyone else, between democracy and making the trains run on time, or whatever other metaphor seems appropriate. I can also see that the people who reassure us that they know how to handle our future, and view any participation by us as a distraction at best, and an infestation to be eradicated at worst, are as often as not talking at least as much nonsense as we are.

Anyone who can contribute even a little to explaining how to close this gap has my vote, including you and John. That said, I don’t think it does any harm to say that we’ve got a long way to go.

Otto Pohl @71

For some perhaps. But I think many more my just simply understand a household balance sheet and get carried along with the emotionality of something they can grasp – that’s a political thing too. That’s how my dad thought – he didn’t have a very strong concept of the nation state. Nor most members of my immediate family, the media in NZ, paid bankster’s hacks, our stupid Labour party. I’m not very sympathetic to trained economists or politicians who by now should know better about sectoral balances. I think we should direct venom, if at all, towards the deserving – the one’s that will willingly change their rhetoric only when they are paid to.

One thing I wonder if your paper should deal with more is something indicated by Galbraith paper and subsequent exile and Chomsky. The reason for many of usual opponents of Keynes staying silent or even switching sides might have been a broad consensus among FIRE and at least some non-FIRE sections of corporate capitalism that an immediate stimulus was needed to avoid a crash. Since Keynesianism was the only basis on which stimulus was argued for, critics faced strong pressure to switch sides or shut up. Once the very rich, what thanks to the Occupy movement is called the 1% were safe, then it was back to business as usual and Keynes bashing.

Of course dealing with this at this state would be a heck of a lot of work. You would have to document the FIRE consensus, and dig up both concrete examples, and theorize a general transmission mechanism. This would be one way of adding the Political Economy aspect Dorman mentioned. It could be done, and I think would close most of the holes that worry you. Easy for me to say – whether you want to do this amount of additional work at this late stage is questionable. But you asked for input, and this is mine.

I think the paper would be stronger if it made at least a nod to the incompleteness of the explanation offered. The mechanisms described are plausible, and well-documented. But this is an area where no single channel operates alone. There had to be, among other things, a general recognition that this was an economic problem (and not, for instance, a moral one), a recognition that academic and institutional economists were the relevant experts, various sets of class and other interests pre-disposing people to one or other stances, a feel among the political nations involved about which interests were the most important, and so on. I would not ask of a single paper that it address all these, just that it try to avoid starting another of those tedious “it’s all about x, no it’s all about y” controversies.

On p. 8,

Highly clustered (i.e. networks where if there are three nodes, A, B,
and C, and A and B, and B and C are linked to each other, there is a high probability
that A will also be linked to B) will see greater likelihood of ideas …

probably should be:

Highly clustered networks (those in which if node A is directly linked to node B, and B is directly linked to node C, then A and C are very likely directly linked) will see greater likelihood of ideas …

p. 36: “self-ramifying” crisis? My computer’s dictionary was stumped by that one. “Self-perpetuating” might suffice; or perhaps “self-propagating.”

Substantively, I note some circularity and lack of foundation in the following passage on p. 16-17: “If government is willing to spend money to boost aggregate demand, it can break the economy out of this trap by boosting aggregate demand, and hence help the economy return to stability. ” Perhaps if it were preceded by a statement like: “The simplistic Keynesian argument is,” it would almost fit; but if that is not the intent, some rewording is called for.

I’d like to see some exploration of Keynes’ views of monetary policy, particularly the idea that low long term interest rates are the key to stable and sustainable investment. If you check out long term rates during the BW era, you’ll see they were generally lower.

We know how to solve stagflation (since we did it). (And having lives through it, it was not so bad). Now how do we get out of a depression with economic Calvinism?

Wow! For a non-economist, this all looks very much like a bunch of theologians arguing, both the situation described in the paper and these comments. And there are parallels. For example, the paper uses the word “theory”. In science, a theory is a model of the world that is consistent with observed reality and has effective predictive value. A “theory” as used in the paper is more like a doctrine, or at best (in scientific terms), a hypothesis. These are certainly not theories in the scientific sense!

And like theology, so many blindingly obvious points are missed. For theology, the blindingly obvious error of most theology is that their gods are fairy stories without no objective existence. For this sort of economic discussion, the most missed points are that (a) it’s about people, guys, not indicators, (b) it must always be better for any economy if people are engaged in genuinely productive activity than if they are sitting around doing nothing (I don’t mean pure make-work schemes, but genuinely productive), and (c) the movements of pieces of paper or bits of data on a network are the problem, not the solution (you really don’t see how financiers are stealing so much, do you?).

Any academic macro-economist who isn’t on record a few years ago as identifying that this mess was going to happen is really not entitled to have their opinion on how to solve this mess respected, is s/he? Part of the problem of obtaining this “consensus” is that the community of economists is collectively ignorant and incompetent. If this were not the case, you would have come to a consensus by analysis and hypothesis generation and proving. But no, it’s just blah blah blah.

And when somebody shouts “the emperor has no clothes”, like philosophers or theologians, you will bleat “oh you don’t understand” or simply ignore the embarrassment of reality. When an angry Greek guy pointed out that your little adventure game was about something that involved Greek people suffering severely, becoming homeless, wrecked lives, did any of you pick that up? No, that would interfere with your infantile word games.

IIRC Kenyes thought overproduction was the cause of depressions / recessions.

We hear that liquidity was the cause of the great recession.

Is Quantative Easing, a form of stimulus? Or is it just re-animating the Zombehs?

Seems to me, that the problem is not overproduction [though we do overproduce food] but over-leveraging.

I have read, with some effort, the more than 40 pages article you have put together. I found astonishing that you consider all economists mentally interlinked and, therefore, capable of being influenced by a well crafted virus like “Keynesianism”. I have met many economists in my life and they were all normal people, capable of reasoning with their own independent brains. Maybe, it depends from the very ideological cut you have given to the article?

I’ve downloading the file and it’s in a bad state: almost unreadable.

I disagree with note 3 that diffusion hasn’t been important in political science/international affairs. Simons, Elkins et al published an edited volume in 2008 with MIT Press and an article in APSR 2004 on diffusion and economic liberalization.

Even Krugman originally got his NY Times gig, because he was the moderate liberal who could be counted to criticize progressive and heterodox economists and political economists who questioned the post-argentine gatt free trade without free labor, free people or cost to the commons. After Seattle protests Krugman was alas among to tsking tsking as simplisitic the critics (Reich and Baker as i recall) who pointed out the reality of multinational elite power trumping academic economics. Just saying.

I went through the paper briefly and I might have missed something. In any case, I did not find a definition of what you mean by “Keynesianism”.

The definition that I think is most common is that, according to Keynes, output can be, at least in part, stabilized by monetary policy and fiscal policy.

If you include monetary policy though, it is not clear to me that keynesianism was in demise since the 1980s. After all, Greenspan lowered the nominal interest rate to stave off recessions, as the Taylor rule indeed dictates and against what the real business cycle people suggest (“let the economy adjust to the productivity shocks!”).

Even if you exclude monetary policy and focus on fiscal policy, Bush’s tax cuts were sold as a fiscal stimulus to aggregate demand in the 2001 recession. Mankiw was his advisor, the same Mankiw who defended new-keynesianism against the “freshwater” Robert Lucas at the end of the 1980s (and the same Mankiw who puts aggregate demand graphs in his widely used textbook).

So, keynesianism has been on demise only in the sense that, in the three decades leading up to 2008, the consensus was that fiscal policy, via government spending, did not work. I think it would be helpful to clarify that.

Even if this is not the point of your paper, this clarification would also help to ask why that consensus was reached among many economists. Possible reasons include: many economists became convinced that monetary policy is always a better instrument and found themselves unprepared when the crisis hit; they were caught in the conservative anti-government ideology; they thought that government spending has considerable lags and so it risks to sometimes amplify the cycles rather than dampen them etc.

I realize this is theory.

But what in the F?

The experts dont agree [consensus vs dissensus] + political circus.

May as well be discussing quarks and gluons,

Was unable to download – permission forbidden… ?

Citation and collaboration at least as likely to be results as causes of agreement, as the paper accepts. But that means a network described in those terms isn’t plausibly seen as the substrate (or as the proxy for the structures of the processes in the substrate*) along which ideas are diffused.

In particular, a node’s having ‘high degree’ – the economist being widely cited or widely collaborated with – sounds very much like being a highly successful (and probably influential) economist, and that might suggest that lots of economists read their output and are disposed to agree with them.

That might be because they believe that they are good economists, or because they determine which view is the safe career option, or just a response to high status.

One might introduce a directed graph (if that is the right terminology), that is make the ‘influences’ relation represented by the net’s edges potentially assymetric. We ‘might expect’ in that case that the citers and junior collaborators, or generally less high-status economists, would tend not to extert much influence on the high-falutin types that are modelled as nodes of high degree.

But I’m not sure alternative explanations for the data are really to the point, since I’m a bit unclear on the empirical content. I assume there is no data on the actual transmission of ideas in this case; perhaps not even on the proxy of citation and collaboration (which I have to repeat sounds a bit funny as proxy for the totality of influence within the profession, which one might suppose to be a matter of ‘weak ties’ (p13) like reading papers, going to conferences, etc.)

But perhaps it’s reasonable enough to introduce transmission/contagion as a hypothesis. The paper does state We deliberately skimp on the micro-processes and Gathering evidence regarding these structures would involve a massive data collection exercise. However, there is a reasonable proxy – publication patterns among economists (Though, as observed in the ‘notably rare exceptions’ case, a caveat is not a panacea, and the lack of real data can make proxies seem more reasonable than they are.) So maybe more importantly:

1. how well is the explanandum – apparent consensus and subsequent dissensus on Keynesian responses – documented, and was it anything more than a superficial ‘We need a (Keynesian) stimulus, so I agree with the Keynesians’ – did it, for example, take place in an academic forum, or are we talking only about the mass media?

2. Is there reason to think that politicians do actually consider the degree of consensus in the profession , beyond the extreme case (perhaps of rather limited applicabilty) mentioned, in which the economics profession is unanimous so none will support a non-consensus position (p10: actions that run against these experts’ consensual ideas will be treated as less legitimate, and will be more likely to arouse opposition)?

The paper does say (p9) the looser forms of apparent consensus that we describe are best considered as not requiring genuine unanimity, but instead the publicly visible dominance of one set of ideas, and the reluctance or inability of most experts who disagree with these ideas to make their disagreements known in a publicly obvious fashion.

With this in mind and returning to the idea of some network graph that models direction of influence, we might then find that most of the profession can be cut out of the graph, since they do not directly or indirectly exert influence on those nodes which contribute to apparent consensus (or dissensus).

Might we then see a graph which basically features a few high status economists whose ideas are canvassed by politicians? And if so, wouldn’t it then be all the more important to establish how membership of the privileged class of economists is determined; something I’m not sure is attempted, but which is surely of considerable interest in this context?

If we are basically talking about a few high-profile characters from Harvard (etc) who are apparently listened to by politicians, then the ‘powering’ model that examines only how power relations within the expert community affect the spread of ideas (p3), and which would emphasize the effort of Keynesians – who had been marginalized in the previous consensus, to use the crisis as evidence supporting their understanding of economics and to help shape new coalitions (p6) seems beside the point.

The topic instead becomes power or other relations between privileged economists and the politicians who make use of their output.

(And then we need to model – shall we say – ‘corporate patronage’ in the analysis, and we’re writng a different paper a number of other comments here, or https://crookedtimber.org/2010/01/04/tweedledumb-and-tweedledangerous/ or https://crookedtimber.org/2009/01/27/the-cossacks-well-they-work-for-the-czar/ or the discussion in https://crookedtimber.org/2010/10/04/larry-summers-and-his-role-in-recent-us-policy/, etc.)

*of the court of King Caractacus

Happy I finally made time to read this, better late than never.
Screw Tina Brown, this is how to do it.

My one comment: like Gordon@15, I felt Kuhn was a ghost at this feast.
“Paradigm” appears once, and he himself isn’t mentioned at all. But perhaps he’s old news for practitioners in the field, and you’re focused on more recent literature.
Overall, I liked this very much.

@33

Henry, as you’ll no doubt remember from my first comment, I believe it’s perfectly correct to use words that have specific meanings in a given academic context.

What I find impolite (though I’m sure unintentionally so) is your response to layman’s complaints with particular terms. The layman does not need you to tell her who the term is for; this is already abundantly clear, even to people outside your primary audience. What the layman needs to know is what the term means.

A polite response would be a brief definition, or an explanation of any extra specificity the term implies, or perhaps a reference to the work in which the term is coined, or one that explains the term well. In a case where you were using a term less as a matter of compact language, and more as one of navigating a particular ideological minefield in the discipline, then you’d at least want to say that. Preferably with some hint as to what the expert dissensus might entail, yes?

I do like the model you lay out in the paper. And you do explicitly define the way in which you use the term “dissensus”, so the use of the word doesn’t bug me as much as it seems to have set others off. I do think you could have picked a different word to define as “the absence of apparent consensus,” given that the specific meaning of “dissensus” seems to have mutated significantly as it has hopped from one field to another:

“The essence of politics is dissensus. Dissensus is not a confrontation between interests and opinions. It is the demonstration (manifestation) of a gap in the sensible itself. Political demonstration makes visible that which had no reason to be seen”

— Jacques Rancière

The story is one-sided. It explains how the economists influence politics and that has been explained very good with respect to 2008/2009. A large number of governments were sympathetic towards this new set of tools with the Democrats in the US and governments supported by social democrats in UK, Germany, Netherlands, Spain, Portugal etc.
It ignores largely how politics uses civil servants (ECB, Economic Advisers, etc.) to confuse the economic debate in support of their political believes and interests. In Europe that has been enabled by the shift towards more neo-liberal parties in all above mentioned European countries. The Empire strikes back.
Fortunately the economists do influence the political debate, but unfortunately also political power will be used to distort any perception of consensus, if not in the interest of the political believe/ideology. Another example is the discussion about global warming.