Gintis on Summers

[Paul Davidson <PB108928%UTKVM1.BITNET@xxxxxxxxxxxxxxxxx>]

FROM:  Paul Davidson
"      Economics Department
"      523 Stokely Management Center  (615) 974-4221
Nerb G. indicates that the Larry Summers "quote I read did NOT say anything abo
ut the laws of economics being like the laws of engineering" (emphasis added) t
thereby suggesting that I was in error when I indicated that Herb would be
inconsistent when he agrees with both Solow (who argues for nonstationariity
in economics) and Summers (since laws of engineering are stationary and ergodic
) who is arguing for stationary economic processes (as a World Bank official
no less -- who can do real world harm).
 Yet Jim Devine's message (11/12/94 03:41:43 states:
 "In 1991, Larry Summers told listeners in Bankok:
 '...The laws of economics, it's often forgotten, are like the laws of engineer
ing. There's ONLY ONE SET OF LAWS AND THEY WORK EVERYWHERE" (emphasis added).
Now Herb that's the quote I read. Is your email idiosyncratic?
Would you still agree with both Solow and Summers if we accept, at least as
a working hypothesis, that the laws of engineering are stationary? (All this
means is that the laws governing stress on a structure, for example, do not
change from day to day. If engineering laws were nonstationary, then engineers
would find it impossible, for example, to design a structure that when buil cou
ld be assured of supporting weights of x pounds per square foot.
     If engineers dealt woth nonstationarities, they, like economists, would
tend to build elaborate structures that often collapse when put into practical
use.  Yet if Summers believes economists are the engineers of the economy,
then he must believe in stationary stochastic economic processes and
can not be logically consistent with Solow.
     Thanks to those who sent the corrected quote about inconsistency being
the hobgoblin of small minds.

Have a good day!____Paul Davidson
))))_ fax # (615) 974-1686