Season’s greetings

I wish all my students, colleagues and fellow researchers a merry christmas and a happy new year. Let the grace of our Lord Jesus Christ be with us all on this holy day.

… and don’t forget. Christmas spirit is not what you drink.


Realism vs. instrumentalism along the Friedman-Lucas-RBC line

Providing methodological analyses is a possible (and required) contribution to the historiography of modern business-cycle theories. As far as the Friedman-Lucas-RBC line of evolution is considered, it seems to be clear that as we approach the end of this story there is instrumentalism and nothing else in the commentaries. Today the only question is Friedman’s instrumentalism: there have been some intellectual efforts devoted to arguing for Friedman’s realism. Uskali Mäki’s ‘Unrealistic assumptions and unnecessary confusions‘ and Kevin Hoover’s ‘Milton Friedman’s stance. The methodology of causal realism‘ published in ‘The methodology of positive economics‘ are perhaps the most powerful initiations towards this direction. However, it is still the instrumentalist approach that seems to be the standard interpretation (see Paul Hoyningen-Huene’s very recent draft). Whether one focuses only on F53 or scrutinizes the text within Friedman oeuvre makes the difference. In the former case, Friedman can more easily be regarded as instrumentalist, whilst in the latter case there is a tendency for Friedman to be considered as a realist. This generalization, however, is problematic for it is not that difficult for us to find some works of Friedman in which it is instrumentalism that provides the principle of theorizing. Elsewhere I pointed out that Friedman’s Phillips curves are the manifestations of pure instrumentalism. In these models all the assumptions are designed in order that Friedman could achieve the desired theoretical outcomes.

As for Lucas, his instrumentalism seems to be unquestionable. As far as I can consider, the arguments for his instrumentalism are built upon some statements made by Lucas. Here are some examples:

Insistence on the ‘realism’ of an economic model subverts its potential usefulness in thinking about reality. […] On this general view of the nature of economic theory then a ‘theory’ is not a collection of assertions about the behavior of the actual economy but rather an explicit set of instructions for building a parallel or analogue system – a mechanical, imitation economy. A ‘good’ model, from this point of view, will not be exactly more ‘real’ than a poor one, but will provide better imitations. (Lucas 1980: Methods and problems in business cycle theory)


One can ask, for example, whether expectations are rational in the Klein-Goldberger model of the United States economy; one cannot ask whether people in the United States have rational expectations. (the Lucas papers, Box 13, Robert Barro folder)

The message common in these quotations is simple: features of the agents or environment designed in the models should not be looked for in reality. These are features of the model but not that of reality.

When Uskali Mäki started arguing for the realism in economics, he placed his arguments on the fact that it is possible for us to seize some aspects of reality via highly unrealistic models (Realistic realism about unrealistic models). Isolation leads to models which are not like reality, however, in some important aspects they can still bear resemblance to the depicted part of reality. To be perfectly honest, I am a bit confused when reading some analyses about Friedman, Lucas and modern macro. The realist interpretation of F53 seems to be rather weird. When Friedman is talking about the leaves of a tree modelled as if they were rational utility-maximizers, it is very difficult for us to argue for his realism, in spite of the abundance of technical details in his F53 that can easily be reconciled with a realist stance. But the real question is how far we can go along the argumantation for the realism of unrealistic models…? What does Lucas’ instrumentalism stand in? I think emphasizing his insistance on unrealisticness will not do in this respect – or if it will, then Friedman must be an instrumentalist too. All in all, focusing on the unrealistic features of economic models is not decisive in terms of the realist-instrumentalist debate. As Elay Shech emphasizes it in his ‘Scientific Misrepresentation and Guides to Ontology: The Need for Representational Code and Contents‘, misrepresentation is an endeavour when the modeller tries to distort some elements of reality whilst insisting on conveying some reliable information about the modelled system. Shech’s example is the political caricature.

So, I think, it is not enough to underline the distinction between models and reality. Both realist and instrumentalist models in the highly abstract neoclassical mainstream are not like reality. The decisive features of models must be found somewhere else. Now I am inclined to think that it is the purposes of the modellers that we need to study first and foremost. We cannot reach decisions about the realism and instrumentalism of models on the sole basis of the models themselves. Whilst they are important in this respect, we need to consider the modellrs’ intentions.

The true story of a fake paper

Time and again I tell my students about how science works. This is a twofold task, since in order to cover all the aspects of modern science we need to detail both the fuctions and the malfunctions of science. I am a fan of science and economics, thus I want to make young scholars and professionals of the future more cognizant of the dark side of science. Doing so, I may help them to avoid serious mistakes and the best way of raising the standards is to show negative examples. I believe in a realiable science. What is more, as part of the International Peer Review Week every year I do my best to shed some light on the vital role peer reviewers play in modern science. One of my favourite examples is the famous ‘Get me off your f***ing mailing list‘ paper by David Mazières and Eddie Kohler, but the other day I realized I cannot tell the whole story. There are some details that may be interesting of which I know almost nothing. In this short blog post I will try to fill some lacunas of my knowledge about this funny example of modern science.

The paper is from 2005. This is the year when two scholars decided to write a paper to emphasize the negative aspects of science. There is a problematic model in international scientific publication in which publishers of dubious value make efforts to produce journal articles and books with no scholarly value. Whilst such publising houses try to appear to be reliable, internationally acknowledged institutions with well-founded reputation, they are only realizers of an unfortunatly wide circle of predatory publishing policy. In this policy, scientific value is not a concern. Here everything is about money: any paper can be published if the author is willing to pay for it. Such publishers promise researchers an exceptionally quick review phase and after publication an extraordinary wide range of future readers and a large number of citations. However, the published papers are rarely worth attention, so actually these papers are not likely to have any readers at all. Predatory journals follow a rather annoying editorial policy. I remember, some days after the EIPE 20 conference this year I was also contacted by a journal only to be asked to become a member of the editorial board. To my surprise, the editorial board was full of real people, real scientist who were not careful enough to keep away from a predatory journal. They are used by the predatory publishers to hide the true nature of their policy. These publishers tend to send spam e-mails to their targets, this is the reason why Mazières and Kohler were upset enough to write the paper that consists of the repeated sentence ‘Get me off your f***ing mailing list’.

Actually, Mazières and Kohler’s paper was prepared for the 9th World Multiconference on Systemics, Cybernetics and Informatics to protest against the low stadards of acceptance expressed by the organizers of the conference. In fact Mazières and Kohler are excellent scientists. David Mazières is a professor of Computer Science at Stanford University. He received a BS in Computer Science from Harvard in 1994 and a Ph.D. in Electrical Engineering and Computer Science from MIT in 2000. Eddie Kohler is the Microsoft Professor of Computer Science at Harvard at the moment. He received a BS (1995) and then a MS (1997) and a Ph.D. (2001) in Electrical Engineering and Computer Science, MIT.

In 2014, the story of the paper continued. That year Peter Vamplew (Federation University, Australia) after receiving some spams from the International Journal of Advanced Computer Technology submitted the paper to the editors. He must have been surprised by the fact that the paper was sent to reviewers and rated as an excellent paper worth publishing. Moreover, the journal was really ready to publish the paper in exchange for a 150 USD fee. Of course, Vamplew refused to pay.


Michel De Vroey at Budapest Business School – A short summary

On 5-6th October Michel De Vroey visited Budapest Business School to give two lectures on the evolution of modern macroeconomics. Michel is a well-known historian of modern macroeconomics with a special interest in the theories of the business cycle; professor emeritus of the Catholic University of Leuven and a visiting scholar at a lot of prominent universities including the Sorbonne of Paris and Duke University of Durham, NC. He is the author of some widely read and acknowledged books written both in English and in French and a series of important papers.

Prof. De Vroey has earned the admiration of the professionals in the field of the history of economics by his enormous knowledge, by his outstanding ability to reorganize some well-known facts in strikingly new ways and by his courage to trigger new debates in which we can reopen some old questions in order to move towards a new consensus. His thought-provoking ideas pave the way for a more in-depth understanding of the history of our discipline. He is one of the few who have already realized that the history of economics can hardly be discussed without exploring the methodology of economics. In his recent book, The history of macroeconomics from Keynes to Lucas and beyond, the history of modern macro becomes an exciting story of revolutions along the way to a unified big picture of seemingly conflicting ideas. As I had the privilige of being his host during his staying, we could have discussions about a lot of exciting topics and I found myself in the delightful position of getting to know him personally while sipping coffee. He is a great arguer with firm and solid views on his field of interest… an experienced researcher with thorough insights on the socialisation conditions of theoretical economics and the history of economics as a discipline… and a powerful master of making science.

His Budapest lectures were grandiose assessments of the methodological and theoretical transitions of modern business-cycle theories during the 20th century. In his ‘Mainstream economics: Its rise and transformation’ speech (based on his recent working paper The rise of a mainstream in economics co-authored by Luca Pensieroso) Prof. De Vroey discussed and evaluated the process through which mainstream economics has emerged as a methodological standard. This assessment seems to be a novel approach to the mainstream–non-mainstream relationship, so the Hungarian audience deeply interested in institutional economics found the lecture highly stimulating.

Michel’s second lecture was focussed on his recent book mentioned above. Here Michel discussed the Keynes-Lucas and the Lucas-RBC transitions. The audience were guided through the dynamic evolution of modern macro starting with Lucas’ early years (an applied economist) and the Lucas-Rapping papers, through the emergence of neo-Walrasian macroeconomics and the new standards for a ‘good’ theoretical research to the outburst of Kydland and Prescott. The lecture was closed by an intense debate. I hope Hungarian professionals found the lectures as thought-provoking as I did.



Faces and places