Scott Sumner has an interesting thread about his recent paper on the "Princeton school" of macroeconomics, which includes among others yours truly and a guy named Bernanke (what ever happened to him?) 1/
https://twitter.com/ScottSumnerTMI/status/1450500146219737089
I mean, I have to like this thread and the paper ... 2/
https://twitter.com/ScottSumnerTMI/status/1450500149533237250
Indeed, I think that 98 paper may be the best thing I've done. And it offers an occasion to maunder on a bit about doing economics 3/
The thing about economic research is that there's no one good way to do it. There are different styles, different methodologies, all of which have their virtues when used well, and which can complement each other 4/
The latest Nobel was for the exploitation of natural experiments, which has been hugely informative, but can't be used on all questions 5/
My own academic work generally involved a different strategy: devising toy models that offered a stylized, simplified account of how the world might work, and asking whether those models fit the stylized facts 6/
Others do detailed dives into the richness of history; and there is a role for rigorous theoretical modeling to derive general principles, even if the assumptions of those models should always be taken with a grain of salt 7/
None of these approaches is better than the others — they play different roles and can, as I said, complement each other. For example, I'd argue that the events surrounding the 2008 financial crisis offered natural experiments that bear on our toy macro models 8/
The main guiding principles are humility — a model is only a model, not The Truth, empiricism — if the facts don't fit your story, change the story — and to always, always remember that economics is about people 9/
God, I sound like an old guy, don't I? You kids get off my lawn! 10/
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