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October 11, 2011 / 74

Sims and Sargent’s Nobel Prize Awarded for Nothing Useful

I don’t think my research and methods have any simple or direct implications for the current situation,…
Christopher Sims

Gosh… who’d a thunk such a think could happen after Barack Obama was given a Nobel Peace Prize for doing absolutely nothing?

As I posted in response to a blog article in the Guardian :

If there are no simple or direct applications for the “work” what possible good is it? Knowledge that cannot be applied is only partial knowledge, and without application in the real world there is no way to determine whether it is right or wrong. So given that, how and why did these Princes of Academia “earn” a prize of any kind?

When I was starting work at the age of 12, my “boss” would tell me how to do something, then show me the work in action, and ask if I understood it. If I said yes, then he expected to see me put that knowledge to work – literally and physically. And if a similar situation arose later, he’d expect me to be able to modify what I’d learned and apply it without further “study”. If I couldn’t apply what he had taught me, then I obviously was either stupid or incompetent.

Based on what I’ve read here, I’d have to say that there is a very real possibility that these economists are both, especially since the solution to the current global depression is clear and simple, and has precedents in the real world. The answer is neither Chicago School nor Keynes. The answer is a well regulated economy. Neither too much or too little regulation of the financial industry first, and all other major industries later. For a working model, study the US economy between the period of 1945 and 1970.

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