ソロー2010 U.S. HOUSE OF REPRESENTATIVES. HEARING CHARTER.

 ソロー2010 U.S. HOUSE OF REPRESENTATIVES. HEARING CHARTER. Building a Science…

U.S. HOUSE OF REPRESENTATIVES. HEARING CHARTER. Building a Science of Economics for the Real World  2010

https://www.govinfo.gov/content/pkg/CHRG-111hhrg57604/pdf/CHRG-111hhrg57604.pdf

Hearing: Building a Science of Economics for the Real World 2010

https://youtu.be/PaoLvCOTbBI

2:13:40

ソローがdsge批判を証言していて有名 

Hearing: Building a Science of Economics for the Real World

https://youtu.be/PaoLvCOTbBI

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Mr. SOLOW. Thank you. I don't know how a hero is supposed to respond. Before I taught at MIT, I was a Technical Sergeant in the U.S. Army, and if you just call me Sarge, I will settle for that. That is the way I spent my youth. I do think that science and technology—first of all, let me say I don't believe that the current crisis and the long recession will fundamentally impair the long-run growth potential of the U.S. economy, although it is going to take a long time to shake off those effects. But they remain there because, just as you said, the basic sources of that growth are in innovation of various kinds. What I think may have changed for the longer run is where in the economy that innovation takes place. We may have suffered from an excessive innovation in the financial services sector of the economy. I love Paul Volcker's remark that the best financial engineering innovation of all was the ATM machine. But I think, for instance, that the Committee possibly ought to think that if from now on— I suspect to be true—that the weight of the service sector in our economy is permanently bigger than it was in the first half of the 20th century or even in the second half of the 20th century, what does that say for the character of innovation that can affect the economy? I used to tell students and others that services are just like goods, the only difference being you can't inventory a service. I can't get three haircuts so that I don't have to go back again. But there may be differences in the way, in the kinds of science, the kinds of innovation that generate productivity in the service sector. There may be differences in the reception that service-sector firms can give to technological innovation, and I think that is a good subject for the Committee on Science and Technology to pursue. I have no doubt that those potentialities for long-run growth or productivity are still there. During the buildup of the great stock of computers in the United States, most of those computers were being bought in the service sector: in retail and wholesale trade, in financial services and elsewhere. And some service sectors exhibit very rapid growth in productivity, but that is the kind of long-run change in the economy that may affect the role of science and technology. But that role remains fundamental for growth, that it is the generator of long-term growth I think is undoubtedly still true. Thank you. 

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Ms. DAHLKEMPER. Dr. Solow, would you like to comment? 

Mr. SOLOW. Thank you. I just wanted to add to what Sidney just said, with which I agree, that if we simply look at northwest Pennsylvania, your area, there are lot of long-term unemployed people for a number of reasons—for at least two big reasons, none of which has to do with a matter of refined incentives that are provided to them by the unemployment insurance system. One is that in every recession that follows a financial crisis, there is a tendency for unemployment to be very prolonged because the blow to business confidence and the blow to the confidence of lenders in the creditworthiness of businesses is such as to make businesses unwilling to make long-term commitments to employment. But secondly, western Pennsylvania is not an area full of rising industries, so that long-term unemployment, I suspect, has been a problem there that is antecedent to the financial crisis. I think one has to ask, what are in fact the—and no simple model is going to do this for you—you have to ask, what are the possibilities for northwest Pennsylvania or for any other particular region of the country? What are the development possibilities that are there? If there are development possibilities, those are the things to pursue. And, in the meantime, I think it is simply a matter of humanity to support the 50-plus-year-old workers who clearly are not laying down on job search because they are getting UI benefits. They are not searching so actively because they know damn well there is nothing there to find. But one ought to focus, a) on the economic development of the region, and b), once that is in hand, or in the head at least, on preparing the labor force of the area for whatever kind of development seems promising. But looking at piddling little incentives, I think, is not going to help us at all.

1:17:49

 Ms. DAHLKEMPER. Thank you. That is sort of the sense I get from talking to people in my district all the time. Thank you very much. My time is expired. Chairman MILLER. Thank you, 

Ms. Dahlkemper. Dr. Broun is recognized for five minutes. 

Mr. BROUN. Thank you, Mr. Chairman. The famous philosopher Voltaire once said that ''the perfect is the enemy of the good.'' We use models such as weather forecasts every day in society knowing that they are not guaranteed to be correct all the time but accept this based on the importance of the utility of the information that the models produce. Dr. Solow in his testimony argues that ''the DSGE model has nothing useful to say.'' I hope I quoted you correctly. I think so. Should the economists throw away the DSGE model approach outright or cautiously use the model with the understanding that there are limitations and shortcomings? For the panel. Dr. Solow, to begin with. 

Mr. SOLOW. I think it is the latter. First of all, a lot depends on what you mean by the DSGE approach. If you simply mean that particular collection of assumptions, then I think there is nothing holy about that, and those assumptions can be discarded the way any set of assumptions can be discarded. If you mean by the DSGE approach being dynamic, being stochastic and being interested in general equilibrium, then I think that approach can be pursued, al though I share Scott Page's view—and, I suppose, the view of most of us here—that the presumption of equilibrium is a little excessive. But I think there is a lot—I don't want to discard DSGE. The people who do it are among the brightest macroeconomists we have. They are not foolish. I do think they are neatness freaks like me and tend to be pushed by their neatness freakery into looking further at this, but I do think it has to loosen up.2 I do think that one wants to give up the representative-agent presumption; I think that one has to give up the devotion to equilibrium and keep the broader methodology. And in the course—let me just add one more thing—in the course of meeting criticisms from sourpusses like me and from the data, the DSGE people have made a lot of modifications, and in the course of doing that they have done a lot of good work. I would like to focus on that and give up some more of the more egregious assumptions. 

DAHLKEMPER

ソロー博士、コメントをお願いします。

ソロー

 ありがとうございます。ペンシルベニア州の北西部、つまりあなたの住む地域を見ると、多くの長期失業者がいます。それにはいくつかの理由がありますが、少なくとも2つの大きな理由があります。ひとつは、金融危機のあとの不況では、失業が長期化する傾向があることです。これは、企業の信用や貸し手の信用が失墜し、企業が長期的な雇用の約束をしたがらなくなるためです。第二に、ペンシルベニア州西部は産業が盛んな地域ではないので、長期失業は金融危機以前からの問題であったと思われます。ペンシルベニア州北西部や国内の特定の地域にはどのような可能性があるのでしょうか。そこに開発の可能性はあるのか。もし開発の可能性があるのなら、それを追求すべきです。その一方で、50歳以上の労働者を支援することは、単に人間性の問題だと思うのです。彼らは、何も見つからないとわかっているから、それほど積極的に仕事を探しているわけではありません。しかし、a)地域の経済発展に焦点を当てること、b)それが手に入ってから、あるいは少なくとも頭の中で、その地域の労働力を、どんな発展でも期待できるように準備すること、に焦点を当てるべきである。しかし、小手先のインセンティブに目を向けても、まったく役に立たないと思うのです。

1:17:49

 DAHLKEMPER

ありがとうございます。私の選挙区の人たちといつも話していて感じるのは、そんなところです。どうもありがとうございました。私の時間は終了しました。MILLER会長. ありがとうございました。

Dahlkemper

ブロウン博士を5分間紹介します。

ブロウン

 ありがとうございます、議長 有名な哲学者ヴォルテールがかつて言いました''完璧は善の敵''です 私たちは、天気予報のようなモデルが常に正しいとは保証されていないことを知りながら、モデルが生み出す情報の有用性の重要性に基づいて、毎日社会でそれを受け入れている。Solow博士は証言の中で、''DSGEモデルには有益なことは何もない''と主張している。引用が正しかったでしょうか。私はそう思います。エコノミストはDSGEモデルのアプローチをそっくり捨ててしまうべきなのか、それとも限界や欠点があることを理解した上で慎重にモデルを使うべきなのでしょうか？パネルディスカッションのために まずSolow博士からお願いします。

SOLOW

私は後者だと思います。まず第一に、DSGEアプローチというのが何を意味するかに大きく依存します。もし、あなたが単に特定の仮定の集合を意味するのであれば、その仮定は神聖なものではなく、どのような仮定の集合も捨て去ることができます。DSGEアプローチがダイナミックで、確率的で、一般均衡に関心があるという意味であれば、私はそのアプローチを追求することができると思います。しかし、私はDSGEを捨てたくはないのです。DSGEをやっている人たちは、マクロ経済学者として最も優秀な人たちの一人です。彼らは愚かではありません。代表エージェントの仮定を捨て、均衡への傾倒を捨て、より広範な 方法論を維持する必要があると思います。私のような気難しい人間からの批判やデータからの批判を受けながら、DSGE研究者は多くの修正を加え、その過程で多くの良い仕事をしました。私はそこに焦点を当て、もっとひどい仮定をあきらめたいと思います。

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1:34:50

Mr. SOLOW. 

Thank you. I am glad to take a crack at that. In our discussion here, possibly because it is set up as a discussion of DSGE models, we tend to think and talk as if the choices are you can do DSGE or you can do something else. And Dr. Chari suggested, ''Oh, well, DSGE can be a big raft, climb aboard.'' I don't want to climb aboard. I would rather have the DSGE people take a swim off the raft. There have been, and still are, long traditions of work, theoretical and applied, in macroeconomics which have had their ups and downs, but they are not all novelties or things that we ought to try for the first time. My hero in macroeconomics, now alas dead, was James Tobin, Professor James Tobin of Yale University and a very dear and close friend of mine. Jim Tobin did macroeconomics in a way that paid, I think, just about the right attention to the microeconomic foundations of macroeconomics. He made sure that everything he did was compatible with the truth that what happens macroeconomically is the aggregation of millions of firms and individuals, and one wants only to say things that are compatible with that, and that give reasonable results that pass the smell test. Tobin, and not only Tobin but many others besides, left a large body of work which is now all of a sudden forgotten or ignored, and I think that is a terrible mistake. We should simply go—one of the things we should do is continue those traditions. They all worked in terms of aggregate supply and demand in one way or another, and they focused their research on learning more about the components of aggregate demand or learning more about the components of aggregate supply, and what happens in markets that fail to match demand and supply. And that is a perfectly sound tradition. It is not something new or untried. We could go back to do that or do more of that. I would like to see us do more of that. One of the problems is that the DSGE model is so attractive, as I said, to the neatness freak in many economists that it is very hard for anything else to get any traction, and I hope that we can change that. I hope that the misbehavior of the economic system in the past four years will help to change that. But we don't have to do something brand new, although I am game to give agent-based models a run. I am all for that. There are some new things, but there are some basic existing traditions that could be revived. 

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SOLOW

ありがとうございます。ありがとうございます。この場での議論では、おそらくDSGEモデルの議論として設定されているため、DSGEをやるか、それ以外のことをやるか、という選択肢のように考え、話す傾向があります。そして、Chari博士が「ああ、DSGEは大きないかだのようなものだから、それに乗りなさい」と提案したのです。私は乗りたくはありません。むしろDSGEの人たちにイカダから泳ぎ降りてもらいたいくらいです。マクロ経済学には、理論的にも応用的にも、浮き沈みの激しい長い伝統があり、現在も続いています。私のマクロ経済学のヒーローは、今は残念ながら亡くなってしまいましたが、イェール大学のジェームス・トービン教授で、私の親しい友人でもあります。彼はマクロ経済学の基礎となるミクロ経済学に適切な注意を払いながら、マクロ経済学を行っていたと思います。マクロ経済学的に起こっていることは何百万もの企業や個人の集合体であり、人はそれに適合し、匂いテストに合格する合理的な結果をもたらすことだけを言いたいのだ、という真実に、彼は自分のすることすべてが適合していることを確認したのです。トービンは、そしてトービンだけでなく他の多くの人たちも、膨大な仕事を残しましたが、今では突然忘れられたり無視されたりしています。私たちがすべきことのひとつは、こうした伝統を継承することです。彼らは皆、何らかの形で総需要と総供給の観点から研究を行い、総需要の構成要素について、あるいは総供給の構成要素について、さらに学び、需要と供給の一致に失敗した市場で何が起こるか、ということに研究の焦点を合わせていました。そして、これは完全に正しい伝統です。新しいことでもなければ、試されていないことでもありません。私たちはこの伝統に立ち戻り、さらに多くのことを行うことができます。私は、そのようなことをもっとやってほしいと思います。問題の1つは、先ほども申し上げたように、DSGEモデルが多くの経済学者の中の整頓好きにとって非常に魅力的であるため、他のものが牽引されることが非常に困難であるということであり、私はそれを変えることを望んでいます。この4年間の経済システムの不始末が、それを変えるきっかけになればと思います。しかし、まったく新しいことをする必要はありません。私はエージェントベースモデルに挑戦することに賛成です。それはそれでいいのです。新しいこともありますが、既存の基本的な伝統もあり、それを復活させることもできます。

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Chairman MILLER. Ms. Dahlkemper is recognized for five minutes. Ms. DAHLKEMPER. Dr. Solow, your work highlighted the importance of technology as a key driver of economic growth, and Ms. Biggert had alluded to that earlier in her questioning. And we look for budget savings and, you know, we talked about western Pennsylvania where I am from and manufacturing-based economy in large part. How should we prioritize spending to guarantee that what we spend represents the best investment for our future? Mr. SOLOW. You really want me to tell you how to do that? Ms. DAHLKEMPER. We are looking for answers. Chairman MILLER. You can use your full five minutes. Mr. SOLOW. Are you speaking primarily of expenditures on science and technology or expenditures broadly? Ms. DAHLKEMPER. Well, expenditures broadly. Mr. SOLOW. I think that you ought to—there are two aspects to public expenditures, especially now, in the next couple of years. One is that public expenditures of any kind will provide some employment and some secondary expenditure as well and, perhaps at longer-term costs in terms of accumulating debt, would certainly improve the economy, would put idle resources to work. That is what I am trying to get at. The second aspect of public expenditures, which would be true even if there were no idle resources to put to work, are that you have to think in terms: What is the social benefit? What is the benefit to society of spending money on object A as against spending an equivalent amount of resources, of real resources, on B? And in other words, sometimes the cliche´s are right; and I think that costbenefit analysis, although a cliche´, is the right answer to this question when all resources are reasonably fully employed. And in my view, and I have no personal interest in this, I think that expenditures on the promotion of innovation in science and technology, including social science and organization and things like that is, are resources well spent in our economy. On the other hand, right now, in 2010, I think that almost the dominant fact about public expenditures is that they have a good shot, when interest rates are low and staying low, of putting idle resources to work. That doesn't obviate the cost-benefit analysis, because you can put resources to work in one way or in another, and your job as a legislator is to make that judgment for people. Was it Dr. Broun that quoted someone, I don't know with attribution or without, that science describes but doesn't prescribe? Well, the same is true of economists and economics. It is your judgment what is the most socially beneficial use of a real dollar's worth or a real million dollars' worth of labor and capital in our economy, and that changes from time to time. So there is no reason to expect there to be an answer that is valid for five years. Ms. DAHLKEMPER. Thank you. Dr. Page? Mr. PAGE. And one thing we have all mentioned is that we think of the economy as the sum of these 300 million people, right? And when you talk about the effects of some of these policies, you are taking about aggregating up over those 300 million people—saying if we spend, you know, X million dollars or a billion dollars, we are 

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ｘ

Dr. Solow, you used the phrase, in answer to a question, ''the weight of the service sector,'' and I am not sure you intended that phrase the way I took it the moment that you said it: that, obviously, there are many parts of the service sector that make a useful contribution, but some does just feel like a weight. As a brand-new Member of Congress hearing Alan Greenspan testify, one Member 

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Mr. SOLOW. Yes. So am I. In fact, I was going to interject something along those lines earlier and then I thought I was talking too much so I shut up. I think the doctor's point of view is the right point of view here but I think there is a much broader point, especially in connection with financial services. When we were talking about what kind of research new regulatory bodies ought to do, one of the things that I would like, one of the kinds of research I would like to see done, is this: We have drifted into the habit of talking about the financial services sector as if it justified itself, as if to know and love and earn a lot of money in the financial sector is its own reward. The fact is, God created the financial sector to help the real economy, not to help itself, and one of the kinds of research I would like to see is a much deeper analysis of the way the financial part of the economy is related to the real economy, to the economy of employment and production and consumption and all that. I suspect, as it seems as if the chairman may suspect, that the financial services sector has grown relatively to the point where it is not even adding value to the real economy. It may be adding compensation to its members but it is not improving the efficiency or productivity of the real economy. There are clear ways in which financial activity can and does do that. We know from lots of empirical study that, for economies at a lower stage of development than the United States and western Europe, financial depth really promotes economic growth. It allocates resources better. It allocates risk better. But I have the feeling, as you seem to have the feeling, that we have got to the point where the financial services sector is creating risk rather than allocating it. So I would like to see research aimed, as I said, at the relation between finance and the real economy, and particularly at what is the productivity in terms of the real economy of resources devoted to financial activity. When I spoke earlier of the weight of the financial sector, I was really simply thinking of the service sector. I was really just thinking of the amount of employment that it generates and the fraction of GDP that it generates. They are both very large and increasing. But I would not take for granted that because the financial sector is large and growing, that it must be profitable in the sense of beneficial to the efficiency and productivity of the real economy. Chairman MILLER. Well, my time is expired, but I do have one other question that actually seems pertinent to the work of the Committee. If we assume that one of the reasons, perhaps the principal reason, we hold hearings is to inform the decisions that actually may come before us, one of the things that the Federal Government does is fund economic research. Dr. Solow just discussed some of the additional research he thought would be useful in informing economic decisions. Dr. Colander in his testimony talked about how we might reallocate the $27 million that we spent in NSF for economic research, which doesn't seem like that much in the scheme of things, given the importance of the issues. Do any of you have a view as well on how we might reallocate those resources? Dr. Solow? Mr. SOLOW. I will defer to anyone else who wants to say anything about this. In a way, I have to disagree with David about his recommendation. Let me just say that first. I am not—in fact, I am a little appalled at the idea of appointing physicists and mathematicians and statisticians to review committees for the economics part of NSF. In my excessively long experience, physicists and mathematicians are capable of infinitely more stupidity about the economy than economists are, and not only capable of but they exercise that capacity frequently. I would—but I do have a small, tentative, extremely tentative suggestion of a way in which funds devoted to NSF's economics division might be profitably employed that I think David might agree with. I spoke of earlier traditions in macroeconomics. It seems to me that as of now those traditions are most carefully practiced not in universities but in organizations, some of them for-profit firms, which do model building in order to do consulting for private businesses and for government agencies. I know the names of several of those, but that is unimportant. And the Council of Economic Advisors, the Federal Reserve Board, the Congressional Budget Office all make use of those commercially or otherwise-maintained macroeconomic models. I wonder whether NSF some—you might provide some funds for NSF that it could spend making grants for basic research done by some of those model-building enterprises. And there I would even like to see the selection committee have representatives from the Council of Economic Advisors, the Federal Reserve Board, the Congressional Budget Office, which have an idea of how to use these models, how they are used, how they might be improved, perhaps by the addition of altogether different agent-based sorts of things. I think that might be a useful thing to do because, as I said, this is where the older traditions in macroeconomics seem to be most practiced these days. Thank you. 

Chairman MILLER. Dr. Chari? Mr. CHARI. I have served on the NSF's review panel in economics and I have been a frequent reviewer for various kinds of proposals at the NSF. I have also performed similar tasks at the University of Minnesota, Northwestern University, for university-wide grant