Must-Read: There are, I think, six things that Paul Romer is objecting to, all gathered together under the portmanteau of "mathiness":
- Claiming that, as a matter of methodology, "good science" requires assumptions that bake my politics into the cake.
- Claiming that a theory is in some sense "confirmed" when in fact it makes no claims about anything observable.
- Hiding your reasoning in a blizzard of irrelevant algebra.
- Uncritically applying to the real world conclusions based on dubious assumptions.
- Focusing on internal consistency rather than external relevance.
- Foundations that are fake--that assume agents and markets that are not in the appropriate sense like the real agents and markets.
The problem with his paper, I think, is that while these six are correlated things, they are six different an distinct things.
Paul Romer and Microfoundations: "A distinction between scientific consensus and political discourse...:
...a divide... between... perfect competition and... imperfect competition... the distinction between appropriate mathematical theory and what he calls ‘mathiness’.... Theory is denigrated... because of the policy implications that may follow.... The microfoundations methodology... can place... a low weight on... evidence.... (Ask not whether price stickiness has empirical support, but whether it has solid microfoundations.)... Paul Pfleiderer... ‘A model becomes a chameleon when it is built on assumptions with dubious connections to the real world but nevertheless has conclusions that are uncritically (or not critically enough) applied to understanding our economy’... defending a particular political view or sectional interest...