One of the New York Times’ political bloggers has posted about a new study looking at how globalization, innovation, and social welfare are related. In particular, the study claims to find that global economic growth would slow down if the United States were to adopt a Scandinavian-style welfare state due to it’s role as the leading technological innovator. I don’t have much of an economics background, so I don’t feel qualified to say much directly about the paper. The NYT blog post points out that other economists disagree with this analysis. What struck me most, though, was that Thomas Edsall, the journalist who blogged about the article, said he couldn’t comment on the article. I can understand that, as he also lacks an economics backgrounds. But I’m a bit peeved at his explanation for this, since his reponse is basically “ain’t nobody got time for that”. He says
Here is Acemoglu, Robinson and Verdier’s first assumption:
and here is their subsequent thought:
Okay, you might think, he’s just making a joke that’s the paper is complicated to an outsider. While the paper (and virtually all technical literature) is confusing to people outside the targeted field, it seems important to point out Acemoglu et al actually say the theoretical framework they develop in the first paper is what brings them to their result. My understanding is that their work is less econometric and based on empirical statistics and more theoretical. I’m not bashing on theoretical economics, it has a place, but like all theories, it will need to be compared to available data. Assumptions are incredibly important in theoretical work. If the assumptions underlying a theory don’t hold for a certain system, then the theory will be less helpful in describing it, like why we can’t use Newton’s laws to describe systems near the speed of light because his assumptions on fixed space and time break down.
For Edsall to just basically say “OMG math” and not bother to explain the assumptions seems like negligent journalism. Of course, he doesn’t need to explain it himself, but when you work for the fricking NEW YORK TIMES maybe you should query more than one economist about opposing thoughts on potentially controversial results. It’s not like the Grey Lady doesn’t still have a lot of clout in policy and academic circles. And I also feels like he grossly misrepresents the context of the assumption. There is actually a paragraph or so of description for each of these equations that defines the variables, and about three pages of explanation and some more mathematical development between the first equation and the second equation.
As someone who has read textbook chapters where there has been nearly more room devoted to mathematical formula than text and has seen pages where Greek letters and English words are in nearly equal abundance, I’m not freaked out by the appearance of a large equation. Having bothered to actually read the text accompanying the equations, I can already see some assumptions that might be relevant in applying this, like what seems to be little accounting for population growth or the United States’ intentional recruitment of high-skill immigrants. It assumes that technology used in the economy is owned by a monopolist, which also seems like a potential limitation to applying the framework.
The paper actually uses a decent amount of calculus. But an understanding of algebra would get you pretty far in the paper. And more exposure to math would perhaps prevent Edsall’s “deer in the headlights” freeze on seeing an equation.