In his very nice Gnome piece Bob concludes
The Keynesian focus on aggregates such as the "stock" of capital and "supply of labor" leads to faulty policy recommendations. The Austrian School has always had a rich conception of the structure of production. Of the major schools of thought, only the Austrians can appreciate what happens to the economy in the wake of a gnome attack — or the collapse of an unsustainable inflationary boom.
Which is in some ways ironic because I am working on data for a paper right now that looks the movement overtime in 72 economic sectors across 50 states across 40 years. Indeed, I am looking for a gnome attack. The extent to which deviation in those variables differs from a normal distribution.
Now, Bob is correct, that at the moment I do not have a good proxy for the location of all capital, at least not stored on my computer. And, I only have rough estimates for the location of all skilled labor in America. But, I did just get a new RA so we will see what I have by May.
However, the larger point is that I think Bob’s analysis and that of many economists in this debate misses what working economists do every day. By that I mean the guys and gals who produce forecasts and analysis for banks and major corporation.
Much of what they do is scour through data looking for these types trends. How is construction in the Great Lakes doing? Is die-press manufacturing in the Mid-Atlantic expanding. Are the railroads that run between Chicago and New York operating with a higher or lower empty car percentage than the ones going from New Orleans to Atlanta? How many new cars did we sell in Imperial Valley last month? What was the average rent in Cleveland?
To be even more specific one of my favorite reports to look through is same-store-sales. We get that from every major realtor every month. And, we get Redbook every week.
That lets us know how the labor day weekend did for example. Or if Macy’s is doing relative better than Bloomingdales. In some of the conference calls we can get details on what kind of things went out from each retailor in each region over the quarter.
Now, the gold mine of gold mines is pure scanner data, which no one that I know of has real time access to. With. that we can tell the exact moment when each thing was sold. When the customer uses a bonus card we know the exact household that bought it.
The thing is, I haven’t seen anything in any of this data that tells a non-Keynesian story. Again, maybe we can find it. Maybe people have suggestions on where to look, but right off it just doesn’t seem to be there.