Re: Nobel Science

From: Stephen Cullenberg (stephen.cullenberg@UCR.EDU)
Date: Wed Oct 13 2004 - 14:08:09 EDT


Prescott's argument is that during the 1930s that labor market institutions and industrial policy lowered normal market hours in the U.S.  He cites Cole and Ohanian who report that market hours declined 21 percent between 1929 1nd 1939.  He then clams that (neoclassical, SC) growth theory predicts the behavior of investment and employment that occurred in the 1930s.  He admits that growth theory does not explain why normal market hours fell so much during the 1930s in the U.S.  Nor does he report direct evidence how this happens (he argues by analogy to France and Spain today).  But, because the fact that labor market hours fell and this is consistent with the prediction of lower investment and output, then as he puts it "My view is that the explanation of why market hours changed is the explanation of the Great Depression."

Doesn't his argument take the logical form of:

If A (decline in labor market hours), then B (decline in investment and output).

Observe B (decline in investment and output), and then infer A (decline in labor market hours).

Does affirming the consequent now qualify as Nobel Science?


At 07:58 PM 10/11/2004 -0400, you wrote:
On Mon, 11 Oct 2004, Stephen Cullenberg quoted Ed Prescott:

"In the Great Depression, employment was not low because
investment was low. Employment and investment were low because
labor market institutions and industrial policies changed in a way
that lowered normal employment."

This is obviously nonsense, but does Prescott produce any argument
to this effect?  Or is it pure assertion?

Allin Cottrell

Stephen Cullenberg             
Professor of Economics       
University of California          
Riverside, CA 92521            

Office:  951-827-1573
Fax:      951-787-5685

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