Saturday, July 15, 2023

Krugman on motivated reasoning in economics

He's right about this, and the pattern extends well beyond positions on inflation. Consider the employment effects of the minimum wage, or the wage effects of immigration. Economists who study these issues tend to be on one team or the other, and their careful and "objective" empirical analysis will more often than not support their team's views. A challenge for anyone who wants to believe in technocracy.

This says something uncomfortable about the economics profession: We’re supposed to be doing dispassionate analysis, but the fact that most economists are consistently either inflation optimists or inflation pessimists whatever the circumstances suggests that somebody is suffering from motivated reasoning. (But not me. I, of course, am totally objective. OK, I do sometimes catch myself engaging in motivated reasoning. But I try to fight it.)

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