Tuesday, October 12, 2010

Peter Diamond Is Not Qualified For Fed Board

One more thing about one of the economics laurates, Peter Diamond. He was previously rejected as a nominee for the Fed board by Senate Republicans who pointed to his lack of experience in the monetary economics area and his pro-inflationist views.

Does the fact that he is now a co-recipient of the Nobel Economics price make him more qualified?

In short: no. Remember, this price was about problems in bringing together buyers and sellers in for example labor markets. This has really nothing to do with monetary policy, and so the arguments againt Diamond are still valid. This is similar to how Paul Krugman's previous largely valid research in the economics of trade doesn't make him a good macroeconomic analyst.

Of course, it is possible for an economist to be a good analyst in more than one subject. But the fact that someone is good in one specialized field of economics doesn't prove that this person is good in other fields as well.