“I have always been an empiricist, so I will be happy to say that if Britain enjoys a boom over the next two years coming from increased confidence, I will be required to quite radically rethink my view of how the macroeconomy operates, and to be quite contrite about the seriousness of the misjudgments that I am making.”
Read the full quote here.
Sorry if I bet that the facts in two years won’t change Larry Summers mind about anything. During weekend religious services economist bow down and pray allegiance to empirical evidence, and Monday thru Friday they forget their prayers and do anything and everything to advance their scientistic and ideological “priors” — and their beloved mathematical hobby horse of the moment — bending the facts to fit whatever prior beliefs they have always held. If you study academic economists like an entomologist studies ants, this is what the data have consistently revealed.
If things work out contrary to Summers’ expectations about Britain — and Summers in fact rethinks his macroeconomics and acknowledges the massive empirical failure of his whole scientific outlook on this matter — I’ll die my hair pink.