Discussion of fresh/saltwater macro from Profiles and Results

[pevdoki1]

Wow, Chess is Life. I would consider yours an absolutely perfect profile (perhaps Harvard undergrad instead of Rutgers would be better, but on the other hand look at InternationalStudent).

What a puzzling bunch of results!!!! I cannot believe you got funded offers at only 5 places out of the 23 (!!!) you applied to. Very, very strange.

[Chess is life]

Well, I appreciate the kind words pevdoki1, but I am not too surprised by what happened. As you may have noticed I got into mostly fresh water schools i.e. Rochester, UCLA, Duke, Wisconsin, etc. I may still make Minnesota. However, I got rejected by all the salt water schools i.e. Harvard, Berkeley, MIT, Yale, etc. This tells me that my professors were right in telling me to not have CATO on my application. Even when I did make schools, they were state schools like UCLA, Wisconsin, and Michigan that are facing harsh budget constraints. Also, I think the whole process is fundamentally arbitrary. There just seems to be a lot of randomness I couldn't control for. So I am not to surprised how it all turned out.

I know you are interested in monetary economics: Did you do the FED Challenge at Suny-Binghampton? I know your school was in my district.

[pevdoki1]

Forgive my ignorance, but I don't know what fresh/salt water schools are. I also don't see why being associated with a libertarian institution would significantly diminish your chances. Many of the big name 20th century economists are libertarians, and would imagine economists at places like Chicago to hate any kind of government intervention. Unless you wrote something weird in your statement of purpose, I don't see why this should have played a big role. That said, there is definitely some sort of trend in your decisions, and it's hard to pull the randomness card to explain all those rejections. Perhaps you can elaborate on the CATO thing?

To answer your question, I did not do the Fed Challenge. In fact, I had to go on wikipedia to find out what it is (though wikipedia says it's a High school thing..)

[treblekicker]

Originally Posted by Chess is life

Well, I appreciate the kind words pevdoki1, but I am not too surprised by what happened. As you may have noticed I got into mostly fresh water schools i.e. Rochester, UCLA, Duke, Wisconsin, etc. I may still make Minnesota. However, I got rejected by all the salt water schools i.e. Harvard, Berkeley, MIT, Yale, etc. This tells me that my professors were right in telling me to not have CATO on my application. Even when I did make schools, they were state schools like UCLA, Wisconsin, and Michigan that are facing harsh budget constraints. Also, I think the whole process is fundamentally arbitrary. There just seems to be a lot of randomness I couldn't control for. So I am not to surprised how it all turned out.

I know you are interested in monetary economics: Did you do the FED Challenge at Suny-Binghampton? I know your school was in my district.

I did the Fed Challenge this last fall. It was the first time my university competed.

[Chess is life]

Originally Posted by pevdoki1

Forgive my ignorance, but I don't know what fresh/salt water schools are. I also don't see why being associated with a libertarian institution would significantly diminish your chances. Many of the big name 20th century economists are libertarians, and would imagine economists at places like Chicago to hate any kind of government intervention. Unless you wrote something weird in your statement of purpose, I don't see why this should have played a big role. That said, there is definitely some sort of trend in your decisions, and it's hard to pull the randomness card to explain all those rejections. Perhaps you can elaborate on the CATO thing?

To answer your question, I did not do the Fed Challenge. In fact, I had to go on wikipedia to find out what it is (though wikipedia says it's a High school thing..)

Firstly, it is called freshwater macro a.k.a. "modern macro" because it is popular at schools in the center of America, particularly near the great lakes or a large body of freshwater. Northwestern, Minnesota, Chicago, Rochester, and UCLA are the biggest names. Saltwater macro is found on the coasts near giant bodies of saltwater. Berkeley, Harvard, and MIT are the biggest names.

Freshwater macro is the approach to studying macroeconomics that Edward C. Prescott pioneered. It assumes prices are not sticky, rules are preferred to discretion (i.e. to eliminate the time inconsistency problem in monetary and fiscal policy) and that government should not intervene in the economy. It built off a lot work that Milton Friedman and Robert Lucas did. When you are at Minnesota you will do a lot of this.

Saltwater macro is keynes and his disciples. Prices are sticky, wages are inflexible downward, and government can and should intervene in the economy.

Freshwater and saltwater people do not like each other. When I was at Rochester I commented on how the school is a freshwater macro program and the professor told me freshwater is just an old word for modern macro. I asked "Then what is saltwater macro?" The professor responded "Garbage!"

So I would not be surprised to learn that the whole CATO thing (Freshwater) had an effect. Also, there is an equally divisive fight among econometricians over the issue of how parameter equilibria in models can change. Should it be the Wisconsin approach or a Harvard approach? I am not as familiar with this dispute because I have no intention of doing research in econometrics, but apparently you will be booed if you present a model that is not in the "correct form" at each school. So I have heard.

When you do research at the Minnepolis Fed you will definitely hear about the fed challenge college and high school editions. If you have time be a judge. It was a great experience.

[Chess is life]

treblekicker what fed district where you in? Did you like?

[pevdoki1]

Freshwater and saltwater people do not like each other. When I was at Rochester I commented on how the school is a freshwater macro program and the professor told me freshwater is just an old word for modern macro. I asked "Then what is saltwater macro?" The professor responded "Garbage!"

I got exactly the same response at WUSTL when I mentioned some sticky price/Keynesian stuff (the word "garbage" was used). I'm familiar with some of the debates, just not the term "freshwater". Maybe the Rochester professor is right that it's an outdated one

Frankly, I thought that any PhD program right now will be teaching you neoclassical (modern) macro. Apparently not..

P.S. let's continue this discussion in the saltwater/freshwater thread; I think this one is meant to be comment-free.