The Paranoid Style in Economics

The dark side of such certitude, however, is the way it influences how these economists engage contrary opinions. How do you convince your passionate followers if other, equally credentialed, economists take the opposite view? All too often, the path to easy influence is to impugn the other side’s motives and methods, rather than recognizing and challenging an opposing argument’s points. Instead of fostering public dialogue and educating the public, the public is often left in the dark. And it discourages younger, less credentialed economists from entering the public discourse.

In their monumental research on centuries of public and sovereign debt, the normally very careful Reinhart and Rogoff made an error in one of their working papers. The error is in neither their prize-winning 2009 book nor in a subsequent widely read paper responding to the academic debate about their work.

Reinhart and Rogoff’s research broadly shows that GDP growth is slower at high levels of public debt. While there is a legitimate debate about whether this implies that high debt causes slow growth, Krugman turned to questioning their motives. He accused Reinhart and Rogoff of deliberately keeping their data out of the public domain. Reinhart and Rogoff, shocked by this charge – tantamount to an accusation of academic dishonesty – released a careful rebuttal, including online evidence that they had not been reticent about sharing their data.

In fairness, given Krugman’s strong and public positions, he has been subject to immense personal criticism by many on the right. Perhaps the paranoid style in public debate, focusing on motives rather than substance, is a useful defensive tactic against rabid critics. Unfortunately, it spills over into countering more reasoned differences of opinion as well. Perhaps respectful debate in economics is possible only in academia. The public discourse is poorer for this.

Raghuram Rajan, Professor of Finance at the University of Chicago Booth School of Business, is incoming Governor of the Reserve Bank of India. He is the author of Fault Lines: How Hidden Fractures Still Threaten the World Economy.

Copyright: Project Syndicate, 2013.

©RIPRODUZIONE RISERVATA