Sunday, April 14, 2013

What the IMF consideres macro

Via Greg Mankiw's blog, I learned about the IMF conference on "Rethinking Macro Policy." See the announcement and program here. I reproduce the program below.

I find this most striking as a reflection on what the IMF considers "macro." Yes, they have the whole spectrum, indeed, all the way from  Geroge Akerlof and Joe Stiglitz on the far left end of traditional Keynesian economics, to... Olivier Blanchard and David Romer on the pretty-far left end of somewhat new-Keynesian economics?

Don't get me wrong, these are all very smart people, in the whole program and the final panel. Akerlof was one of my thesis advisers, and a lot of what I learned from him sticks with me today. But really, this is the entire spectrum of macro? Has anyone heard of, oh, Lucas, Sargent, Sims, Prescott and all their many descendants?  Especially if the project is to "rethink," would not some slight broadening of a spectrum have made sense?

It is a sharp lesson in the range of ideas that the IMF will bring to anything they do.


IMF Headquarters 2
Conference Hall 1
Tuesday, April 16, 2013 

2:45–3:00pmOpening remarks: Christine Lagarde
3:00–4:30pmSESSION I: Monetary Policy 
Janet Yellen


Lorenzo Bini-Smaghi
Mervyn King
Mike Woodford
4:30–5:00pmCoffee break
5:00–6:30pmSESSION II: Macroprudential Policies 
Andy Haldane


Claudio Borio
Stanley Fischer
Choongsoo Kim

IMF Headquarters 2
Conference Hall 1
Wednesday, April 17, 2013

8:15–9:00amRegistration/Continental Breakfast
9:00–10:30amSESSION III: Financial Regulation
Sheila Bair


Jeremy Stein
Jean Tirole
John Vickers
10:30–11:00amCoffee Break
11:00–12:30pmSESSION IV: Fiscal Policy
Janice Eberly


Anders Borg
Roberto Perotti
Nouriel Roubini
2:00–3:30pmSESSION V: Exchange Rate Arrangements 
Agustín Carstens


Jay Shambaugh
Martin Wolf
Gang Yi
3:30–4:00pm***Coffee Break***
4:00–5:30pmSESSION VI: Capital Account Management
Duvvuri Subbarao


Philipp Hildebrand
Márcio Holland de Brito
Hélène Rey
George Akerlof
Olivier Blanchard
David Romer
Joseph Stiglitz
6:30–8:30pm***Cocktail Reception ***
(Venue: HQ2 Second Floor)


  1. The announcement and program appear more akin to an invitation to the Confirmation Bias Ball.

  2. yeah but the chicago school wouldn't be nearly as fun at the cocktail reception...i like this party way more

  3. Prof. Cochrane,

    I know that I often give you a hard time but you are a saint compared to the denial of these people.

    Your ideas are sometimes good, not often bad; they simply are mostly just too vague to be of us and they just will never be enough under present circumstances.

    By contrast, this sentence---well I can understand why you are so frustrated with these people---: "Five years into the crisis, the contours of the macroeconomic policy of the future are only slowly coming into focus."

    What total bunk. The EU has less idea than ever what to do.

    Now, it would hard to do an EU conference this days are the only way out is to junk the Euro, followed by massive bugger they neighbor policies, but that is reality.

    We should be able to rent nice hotels in Spain, Italy, and Greece for $49.99 a night, just as we can in suburban Chicago and more often than you think, at the Palmer House, when you use Priceline.

  4. Your post on the IMF's conference program brings up an issue I've been wondering about: why do smart people in economics feel so confident in their ability to apply government power?

    I am a theoretical particle physicist who became a quant about five years ago. When I moved into finance, I felt that I should teach myself some economics in addition to financial engineering, so I read the textbooks of a graduate syllabus (Mas-Colell Whinston and Green, Ljungqvist and Sargent, Hamilton, your book on asset pricing – which is a gem – etc). What I found is that economics is much harder than physics – it is very hard to know if you're wrong. Yet many economists have really strong opinions about creating huge government programs that will affect the lives of so many people, including those yet to be born.

    In the application of economics to policy, as a scientist, I would imagine it best to do very little unless you really understand the problem and only then through straightforward rules. Pulling on levers and flipping switches at the helm of the state when so many lives are affected strikes me as just a touch arrogant.

    Do you have any insight on this issue? I don't understand it.

    1. Unfortunately, you put your finger on a really scary fact.

    2. Random Walker,I tend to agree with some of your points, but I am not there with you when you write about "creating huge government programs that will affect the lives of so many people, including those yet to be born."

      Exactly what programs do you have in mind? The Department of Defense?

    3. If we don`t know when we are wrong... why are we so sure that doing "very little" is better?.

    4. Random walker, Anonymous

      Excellent questions!!! I think the answer can be found in one of the most important macro papers of XX century:

    5. agree completely with anonymous. You assume that governments doing very little leaves us in a sort of 'natural state' that we shouldn't tamper with in case something bad happens. The obvious point is that the natural state is completely unnatural, already marred with distortions. Doing nothing isn't preserving some kind of natural order, it may just be preserving already present distortions.

  5. I love this -- you can follow it on Twitter:

    During the conference, we will be using the Fund official Twitter account @IMFnews to comment on the conference and start a dialogue. All the tweets will be displayed in a window on the webpage. That way, people who are not able to attend the conference will be able go to the website, watch the event live, and join in a discussion.

    Should you wish to join the tweeting, please use #Macro2013.

  6. They thought it was enough fair balance to not invite Krugman.

  7. A lot of these RBC guys you list see no role for government and their models ahve a conservative bias. What whould be their contribution to the dialogue? Prescott et al. might say something like: "There is no role for government and when we add a larger exogenous shock to DSGE model we get similar moments to the data that includes the great recession -please direct me to the wine and cheese room."
    Seems like a rather pointless contribtuion and having these guys there to argue against gov't invertntion wouldn't advance the conversation very much. You (and marginal revolution etc) have your echo chamber. The world is on the prcipe of glbal catastrophe do to a global soverign debt crisis and regulatroy capture by the banks -when the next leg of the criss moves down it won't be an acceptable answer to the electorate that we will sit on our hands and wait for markets to sort themselves out.

    1. I don't see Tyler Cowen's policy advice as being that dissimilar from that of mainstream New Keynesianism.

  8. It would be interesting to have Sargent - he thinks about real economic policy problems. I do not know what Lucas or Prescott could add unless Prescott shows up for the involuntary humor.

  9. Because this group of economists believes that Lucas and the RBC don't have anything to contribute.

    And why should they be invited? What insight have they got in the current downturn that isn't part of the received wisdom status quo?

  10. How do you determine whether someone is a "leading" economist? Is it because they publish papers that other "leading economists" deem valuable? Is it because they get appointed, one way or another, to prestigious positions at educational institutions or agencies? Why would anyone think that the world's "leading economists" work for universities and trans-national government bureacracies anyway?


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