Arnold Kling has written a piece in which he implies that Keynesians and Monetarists are all victims of confirmation bias. They see things around them that reinforces their priors and they view this as evidence that their worldview is correct. He also concludes by suggesting that he thinks that both schools of thought are wrong. There are a couple of points that I want to assess.
First, I have pointed out confirmation bias before when Paul Krugman described why he is a Keynesian. However, as I discuss in that post, the problem is not that Krugman is wrong, but rather that there are other theories that predict observationally equivalent observations. The key is to develop a null hypothesis to differentiate between the two. Confirmation bias is only a bias if you are incorrect, otherwise it is evidence. (I am reminded of the idea that the first stage of being an…
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Utopia, you are standing in it! 
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