How the (Econometric) Sausage is Made

In many ways, economists are very wishy-washy. We are probably all aware of Harry Truman's frustration with economists and their two hands:  " Give me a one-handed Economist. All my economists say 'on ONE hand...', then 'but on the other..." But, such wishy-washiness is usually a sign of knowledge ... as one learns more about a topic, one realizes how there are never simple answers in complex matters. This leads me to one of my favorite quotes from Mark Twain: " Education: the path from cocky ignorance to miserable uncertainty." Cocky ignorance also goes by another name: the Dunning-Kruger effect . Or, put simply, the ill-informed do not know what they do not know. As an aside, a friend sent me an article this week on how the D-K effect explains our current political predicament.  Anyway, this brings me the topic I want to discuss today: while economists are notorious for being wishy-washy, applied econometricians are not . In my opinion, they abhor ...

There is great value in reading old papers. No, not ones I wrote as a young prof, although I am friggin' old. I mean really old papers. Unfortunately, only a select few have the time and capacity to read such papers... mainly those doing a 2.5 year post doc if you believe Twitter.  While I never did a post doc, I found myself going down a bit of rabbit hole a little while back while editing my lecture notes for the coming year. I read the paper, " Measurement Without Theory ," by Tjalling C. Koopmans, THE REVIEW OF ECONOMIC STATISTICS , 1947. [Note: Not a typo. Apparently the journal name was later changed to  THE REVIEW OF ECONOMICS & STATISTICS .]  Honestly, I was anticipating a paper on measurement error. Instead, I found something that -- building off my last post -- is another aspect of modern applied economic research that distresses me. In fact, it's kind of a two birds, one stone kinda thing as it also relates to that last post as well.  Koopmans is ulti...