COFFEE & BISCUITS

Today is the last lecture, and Prof. Star Wars said it again.  (This professor just has the ability to give curt but immensely insightful comments). 

 On What is “Crappy” Research

Crappy research is focusing on adding variables on the right hand side of a regression.  When he said this, he used an adjective which I did not know to describe this sort of research.  I couldn’t tell immediately whether this adjective is positive or negative, because adding variables on the RHS of a regression does not strike me as an obvious crappy way of doing research because that’s what I saw being done all over the field. 

“There’s a place call the Heritage Foundation which publishes an economic freedom index,”  he said.  “Add it to the RHS, that’s crappy research.”  What you want to do is to write down a model.  Write down a model of economic freedom.  Writing down a model gets you to think about the problem at a higher level.

 I think the style of research he described has been what’s making me felt this place is different from what economics research I learned from Hippie college.  I don’t mean to disparage Hippie College, what I meant is that as an ignorant undergraduate there who have not much training to building models, the only type of research I know how to do is adding variables on the right.  And even then, I hated it.  I had always known there is something better out there.  There is.  Prof. Star Wars said it:  it is the model that get you to think at a higher level.  How is economic freedom related to the other factors in the model and how is it going to drive the results?  We need a model.

 On Growth and Trade

Back to the Sachs and Warner graph.