The identification problem: Vermeer forgeries and AD shocks

I have done a number of posts on two closely related themes.  In this recent post I discussed the common perception during each recession that “it’s different this time.”  In particular, each recession is supposed to have special characteristics that make it unlike the normal garden variety recession—you know what I mean, the kind we learn about in our intro to macro textbooks.  Here are some recent “special” recessions:

1.  1970:  Inflation isn’t falling like other recessions; wages are not responsive this time.

2.  1974:  The big oil shock, this one is supply-side.

3.  1980:  This one is caused by Carter’s credit card restrictions.

4.  1982:  No bounce back this time, the rust belt jobs are gone forever.

5.  1991:  The S&L bubble burst, many banks failed, and commercial real estate was overbuilt.

6.  2001:  This time it was the tech bubble bursting, not a drop in AD.  Plus 9/11.

7.  2008:  The housing/financial crisis.

Interesting how every single recession that I can remember was special.  Or at least it somehow seemed special at the time.  Here is a post from Alex Tabarrok that shows one example of this phenomenon.  He quotes from an old Time magazine cover story:

…why are Americans so gloomy, fearful and even panicked about the current economic slump?

..The slump is the longest, if not the deepest, since the Great Depression. Traumatized by layoffs that have cost more than 1.2 million jobs during the slump, U.S. consumers have fallen into their deepest funk in years. “Never in my adult life have I heard more deep- seated feelings of concern,” says Howard Allen, retired chairman of Southern California Edison. “Many, many business leaders share this lack of confidence and recognize that we are in real economic trouble.” Says University of Michigan economist Paul McCracken: “This is more than just a recession in the conventional sense. What has happened has put the fear of God into people.”

…U.S. consumers seem suddenly disillusioned with the American Dream of rising prosperity even as capitalism and democracy have consigned the Soviet Union to history’s trash heap. “I’m worried if my kids can earn a decent living and buy a house,” says Tony Lentini, vice president of public affairs for Mitchell Energy in Houston. “I wonder if this will be the first generation that didn’t do better than their parents. There’s a genuine feeling that the country has gotten way off track, and neither political party has any answers. Americans don’t see any solutions.”

…The deeper tremors emanate from the kind of change that occurs only once every few decades. America is going through a historic transition from the heedless borrow-and-spend society of the 1980s to one that stresses savings and investment.

Wow! I don’t recall the 1991 recession as being so earthshaking, looking back it just seems like a garden variety recession.  Perhaps at the time we are too close to things, we see too many real things going on, too many specific things, and have trouble looking dispassionately at the picture.  (Later you’ll see why I italicize ‘picture’.)  We have trouble seeing the timeless elements of the recession.

In another post I argued that an additional problem is that we don’t want to admit our own guilt.  Fed policy generally reflects the consensus view of economists.  If we have a demand-side recession that means monetary policy was too tight.  And that means that we (economists) are at fault.  Much better to point out all those “special factors.”

Part 2:  The Meegeren Forgeries

I recently read Jonathan Lopez’s book on the famous Meegeren forgeries.  One passage reminded me of the problem economists have in identifying demand-side recessions in their own time.  Here (p. 6) Lopez describes how Meegeren could fool the experts with paintings that today look so awful, so unVermeer-like:

He was to discover, first and foremost, that a fake doesn’t necessarily succeed or fail according to the fidelity with which it replicates the distant past but on the basis of its power to sway the contemporary mind.  Although the best forgeries may mimic the style of a long dead artist, they tend to reflect the tastes and attitudes of their own period.  Most people can’t perceive this: they respond intuitively to that which seems familiar and comprehensible in an artwork, even one presumed to be centuries old.  It’s part of what makes forgeries so seductive.

Van Meegeren put this principle to work early and did so with notable style and grace, although, at the time, even he was probably unaware of his anachronisms.  Van Meegeren’s lovely Vermeer-esque girls from the 1920s resemble, on the one hand, the genuine article, but on the other, the highly fashionable portraits that the forger was doing under his own name at roughly the same moment.  To the eyes and expectations of the day, what could possibly have been more appealing, on a subliminal level, than an art deco version of Vermeer’s delicate aesthetic?  Indeed, Van Meegeren’s Lace Maker looks as though she would gladly cast aside her labors and fox-trot the night away if only someone would ask her.

I think a lot of economists might have an analogous problem, or perhaps it’s the mirror image of this problem.  There is too much of the present in each recession, and thus we overlook the timeless elements.  Indeed, it is difficult to see those elements until many years have passed.  In Vermeer’s case, it took nearly two centuries before critics could see how his art rose above that of contemporaries like de Hooch and Terborch.

Part 3.  Vertigo

The issue of timelessness in art made me think of Vertigo, which is my favorite film.  Unfortunately, it is marred by the fact that a rather mediocre painting of a women plays a key role in the film.  If only Hitchcock had picked a painting like Girl with the Pearl Earring.  And while we are daydreaming, who better to play the blond in Vertigo than Scarlett Johansson, who actually played the girl in Vermeer’s iconic painting in another film.  There is just enough resemblance to make it work.  But this raises another problem.  Would a famous painting be too jarring—would it break the trance-like spell cast by Vertigo?  If so, then another painting should be produced.  Not by a forger (that would look dated in a few decades) but rather something by a great artist.  The Chinese film Sunflower used paintings by Zhang Xiaogang, one of China’s best contemporary artists.  The paintings only appear for a minute or two at the end.  But the quality of the art (and the remarkable way it fits the story), boosts the film a few notches in my estimation.

Here’s my question; couldn’t someone re-film all of the scenes involving Kim Novak, only this time using Scarlett Johansson?  I know what people are thinking: “Sacrilege!  Just like when Ted Turner colorized those black and white classics.”  But does anyone doubt that Hitchcock would have used Miss Johansson had she been available in 1958?  She’s perfect.

Gus van Sant made a shot-for-shot remake of Psycho.  I am not suggesting anything so drastic.  Jimmy Stewart can stay; we don’t have anyone today who is nearly as good.  And there must be all sorts of computer techniques that could splice Scarlett into the scenes so seamlessly that we’d never notice.   Git er done Gus!

Am I joking?  Of course.  It would probably be a disaster.  But it’s a nice daydream.

Part 4:  Beatrice

Why is The Girl with a Pearl Earring such an uncanny painting?  And why do many of the reproductions look better than the actual painting?    I’m not sure, but the painting does remind me of Vertigo, which isn’t just my favorite film, but is also the greatest film ever made according to a poll of over 500 cineastes. (Sorry I can’t find the link to the poll; Sight & Sound has it at #2.).  And for some strange reason it also reminds me of what Borges called “the most moving lines that literature has achieved.”  Borges sets the scene:

Here is the situation.  On the summit of the mountain of Purgatory, Dante loses Virgil.  Guided by Beatrice, whose beauty increases with each new circle they reach, he journeys from sphere to concentric sphere until he emerges into the one that encircles all the others, the Primum Mobile.  At his feet are the fixed stars; beyond them is the empyrean, no longer the corporal heaven, but now the eternal heaven, made only of light.  They ascend to the empyrean; in this infinite region (as on the canvases of the pre-Raphaelites) distant forms are as sharply distinct as those close by.  Dante sees a high river of light, sees bands of angels, sees the manifold rose of paradise formed by the souls of the just, arranged in the shape of an amphitheater.  He is suddenly aware that Beatrice has left him.  He sees her on high, in one of the circles of the Rose.  Like a man who raises his eyes to the thundering heavens from the depths of the sea, he worships and implores her.  He gives thanks to her for her beneficent pity and commends his soul to her.  The text then says:

[I’ll skip to the English version]

So did I pray; and she, so distant

as she seemed, smiled and looked on me,

then turned again to the eternal fountain.

So he found her again, then she became even more beautiful, and he lost her again. Just like in Vertigo.

(And think how many people stop after Inferno.)

PS.  I’m a bit burned out from blogging, so I’ll take a little break to work on my book.



25 Responses to “The identification problem: Vermeer forgeries and AD shocks”

  1. Gravatar of Lord Lord
    7. October 2009 at 12:19

    The past is clear. The future is hazy. One thing you learn is whatever is the greatest concern of the day, it is rather minor in retrospect compared to what was occurring under the surface.

  2. Gravatar of marcus nunes marcus nunes
    7. October 2009 at 13:24

    I would add to Lord´s comment that the present is confusing. In this context it is useful to remeber that Complexity Economics views economic “patterns” such as business cycles and inflation as emergent phenomena arising endogeneously out of interactions in the system. If so, what changes from one recession to another is the nature of the interaction that gave rise to the observation.

  3. Gravatar of q q
    7. October 2009 at 13:47

    i disagree, strongly, that reproductions of Girl With a Pearl Earring look better than the original.

    no other painting, save maybe Mona Lisa (which operates very differently), expresses such deep dialectic with such subtle balance.

    that is lost on all the reproductions i’ve seen.

  4. Gravatar of Current Current
    7. October 2009 at 16:21

    Lord, Marcus Nune,

    You should read “The Economics of Time and Ignorance”.

  5. Gravatar of ssumner ssumner
    7. October 2009 at 16:44

    Lord, That’s a good point.

    Marcus, I think recessions are both very complex and very simple. The complex part is the subtle forces that come together to produce falling NGDP growth. The simple part is the connection between nominal shocks and real output fluctuations.

    q. I think it reproduces pretty well, but then it’s been a long time since I’ve seen it. I don’t recall how dark the right side of the girl’s face (i.e. her left cheek) really is. It looks very dark in some of the more dramatic reproductions, and not dark at all in others. I thought the painting seemed less dramatic in real life, and less life-like. I actually meant to change the phrase “looks better” to “looks more life-like”, but forget. Obviously the real painting must be better, but most paintings look horrible in reproduction, and I still think this one looks really good. The painting really stands apart from other portraits of the era (even other Vermeer’s.) It has a certain timeless quality that is tough for me to describe–but I guess everyone else notices the same thing. It’s already so iconic that (like the Mona Lisa) it’s getting hard to look at it as a painting.

    Current, Who wrote that?

  6. Gravatar of marcus nunes marcus nunes
    7. October 2009 at 16:58

    I remember (trying) to read it 1 or 2 years after it came out (85 or 86?) and being baffled by distinctions between static and dynamic subjectivism. Didn´t understand it and could not relate it very clearly to Hayek´s work.
    My view is that all interactions are, by nature, dynamic (and have dynamic consequences which are essentially unpredictable.
    The past is only “clear” to the extent that we come up with some (conforting) explanation of it. The present is “confusing” because there is not a (few) number of satisfactory explanations of what is going on and the future, more than “hazy”, will always be somehow “surprising”. Sometimes pleasantly, sometimes not so.

  7. Gravatar of Greg Ransom Greg Ransom
    7. October 2009 at 19:48

    The 1991 thing was politics. GOP recessions are always bigger and longer, depending on the election cycle.

    And almost every recession since 1929 has involved housing — I think only one didn’t (Leamer)

  8. Gravatar of Greg Ransom Greg Ransom
    7. October 2009 at 19:49

    Rear Window.

    Not even close.

  9. Gravatar of azmyth azmyth
    8. October 2009 at 00:29

    Economics of Time and Ignorance was written by Jerry O’Driscoll and Mario Rizzo. They have a blog at I know you’re swamped Scott, but they have a good article every once in awhile. Enjoy the break; you’ve been extremely prolific lately.

  10. Gravatar of ssumner ssumner
    8. October 2009 at 03:31

    Marcus, I think the past present and future are all confusing. But as you say we make the past less confusing by creating simplified models. One such model is AD shocks.

    Greg, Yes, they usually involve housing, but they always involve manufacturing, especially capital goods. BTW, all business cycle theories that I am aware of predict that capital goods will be more cyclical than non-durable goods and services.

    Greg#2, I like Rear Window as well, but Vertigo is in a class by itself. It’s Hitchcock’s most personal film.

    Thanks Azmyth, That blog looks pretty good.

  11. Gravatar of Current Current
    8. October 2009 at 03:58

    Scott: “Who wrote that?”

    Gerald P. O’Driscoll and Mario J. Rizzo.

    It’s not generally about the sort of things you are discussing, but more about the perspective of the individual actor.

    marcus nunes: “I remember (trying) to read it 1 or 2 years after it came out (85 or 86?) and being baffled by distinctions between static and dynamic subjectivism. Didn´t understand it and could not relate it very clearly to Hayek´s work.”

    I haven’t read the book myself, I just point it out because I know it deals with the sort of thing you mention in your post. I understand there is a lot of criticism of the “static” and “dynamic” subjectivism business and that few since have used the distinction.

    I understand that it relates more to Lachmann than to Hayek.

    marcus nunes: “My view is that all interactions are, by nature, dynamic (and have dynamic consequences which are essentially unpredictable.
    The past is only “clear” to the extent that we come up with some (conforting) explanation of it. The present is “confusing” because there is not a (few) number of satisfactory explanations of what is going on and the future, more than “hazy”, will always be somehow “surprising”. Sometimes pleasantly, sometimes not so.””

    I think that’s a reasonable way of looking at things. Although the past is not fully known, it is known better than the future. And, even if the past can’t be understood the products that past action has produced are often easier to understand.

  12. Gravatar of Current Current
    8. October 2009 at 04:03

    Have a good break Scott.

  13. Gravatar of Current Current
    8. October 2009 at 04:39

    Bryan Caplan comments….

  14. Gravatar of Richard A. Richard A.
    8. October 2009 at 04:52

    The Bernard Herrmann score to Vertigo has been available on CD for the past several years.

  15. Gravatar of Josh Josh
    8. October 2009 at 05:58

    Scott, you wrote, “I don’t recall the 1991 recession as being so earthshaking, looking back it just seems like a garden variety recession.”

    Indeed, I believe that most would agree with that view. However, in my old office there was a stack of The Economist that had been on the shelf since I arrived. The one I found particularly amusing was a cover story from 1991 that read, “Bad Times Ahead?” (or something to that effect) and the cover featured a Depression-era picture.

    I don’t know that this is relevant to anything substantive, I just thought you would find it amusing as well.

  16. Gravatar of Greg Ransom Greg Ransom
    8. October 2009 at 06:17

    For the purposes of his heterogeneous production model of the lengthening and shortening of the time structure of production (in response to optimism effects, bandwagon profit effects, erroneous risk assessment effects, interest rate effect, etc.) Hayek counts houses and cars as capital goods, see his _The Pure Theory of Capital_.

    Scott wrote:

    “Greg, Yes, they usually involve housing, but they always involve manufacturing, especially capital goods. BTW, all business cycle theories that I am aware of predict that capital goods will be more cyclical than non-durable goods and services.”

    Aren’t most of these models one-good or two-good models, or models assuming homogeneous “capital stuff”, or models that assume that no-one ever makes a choice between more or less time consuming production processes producing greater or less output?

    I.e. don’t they assume away the central problem of economic coordination in an actual capital goods using economy — like we have in the real world?

    It sounds like a rhetorical question, but actually it isn’t.

  17. Gravatar of Greg Ransom Greg Ransom
    8. October 2009 at 06:27

    “I like Rear Window as well, but Vertigo is in a class by itself. It’s Hitchcock’s most personal film.”

    I get the Hitchcock factor, but don’t get the love for Vertigo.

    I know lots of people like yourself who are moved by it.

    I think its like humor. You either laugh or you don’t.

    Metaphorically, Vertigo doesn’t make me “laugh”.

    I can’t get to “a suspension of disbelief” with it — and Hitchcock’s personal issues don’t connect, at least with me.

    Vertigo is a “personal” film in more ways than I think most fans understand.

  18. Gravatar of q q
    8. October 2009 at 07:46

    i think good reproductions of GWTPE can be beautiful but to me they all miss the point of the painting. (i used to have a good reproduction on my wall and enjoyed it very much until it faded a bit.) personally i think that other paintings like his, like ‘the little street’, do better in reproduction, and as i think of his work as one thing as opposed to individual paintings, i don’t mind which one i’m looking at so much.

    there is apparently some kind of vermeer exhibit up here in new york city right now. there is as well as a very nice exhibit of william blake’s work at the morgan library; there is also some excellent abstract/figurative photography by sally mann on display at a gallery here.

    have a good break.

  19. Gravatar of Lee Kelly Lee Kelly
    8. October 2009 at 10:28


    I have been thinking about macroeconomics a lot for the last couple of days, especially when regard to your ideas about NGDP targeting and the like. Not only have I made several minor breakthroughs in my understanding, but in the process come to be more and more impressed with everything you have been writing.

    Thank you!

  20. Gravatar of rob rob
    8. October 2009 at 20:46


    Another great post. Your analogies put things in perspective. Without them, it would be hard for a layman like me to have any idea what you were talking about. Great writing! BTW – what is the book about?

    Also: it seems the obvious arb trade now would be to short gold and buy TIPS. But there must be a reason why the market doesn’t view this otherwise “obvious” disparity as such. Any ideas?

  21. Gravatar of rob rob
    8. October 2009 at 21:03

    Also: you probably know this, but Hitchcock hated Kim Novak. I know she wasn’t his first choice: I forget who was. Interesting point about the mediocre painting. It does stand out, in the frame of Hitchcock’s artistic eye. My guess is that he wanted it to stand out in the sore thumb way that it does. But your point about Meegeren is a new idea to me. Hitchcock was ahead of his time, but not everything he did was. I think the painting needed to exist in a very fictional world. Hitchcock’s famous statement: You try to “take a picture of the picture” applies. It reminds me of a Calvin and Hobbes in which Calvin asks his dad why old pictures are in black & white and his dad responds that the pictures were in color but they were color pictures of a black & white world.

  22. Gravatar of ssumner ssumner
    10. October 2009 at 08:01

    Current, Thanks for the Caplan link. He actually got it backward, my point is that this time it isn’t different. It is just more severe.

    Thanks Richard A.

    Josh, Thanks, that Economist headline is a good example. I think there is the unspoken belief that monetary policy has become much better at stabilizing the economy, and therefore AD should grow at a fairly steady rate. When it starts falling, I think there is a panicky feeling that something invisible is going wrong. I’m old enough to recall that every recession since 1970 has been perceived as qualitatively different.

    Greg, This isn’t my area, so I hope someone corrects me if I am wrong. But I think most models at least implicitly assume a sort of “degree of capitalness”. I recall one professor saying that a can of beer was a capital good that depreciated very rapidily as you drank it. It is true that most formal models treat capital as homogeneous, but I think if you look below the surface they implicitly assume that those items that are less durable, like cars, will behave less like capital than the more durable assets, like homes and office buildings. In other words, cars are sort of half capital and half consumer good in the way they behave. This may have nothing to do with Austrian capital theory (which I know little about), but I think it is an implicit recognition that the durability of an asset affects the cyclicality of production.


    There are lots of aspects to film; screenplays, acting, music, cinematography, etc. Most people I know are primarily interested in films as theater, as a play put up on the screen. I don’t have particularly good taste in music, action or dialogue; only in the visual aspects of film do I seem to have some aptitude. Thus I gravitate toward films that are good at telling stories with visual images. This means I like lots of films that other people consider boring, and also that I can’t stand watching films on TV.

    Unfortunately, TV is the only place most people are able to watch older films. I have been lucky to seem almost all the Hitchcock films (even his silent ones) at the theater. If I was watching a movie on TV, I would much rather watch Rear Window than Vertigo, it is a much superior piece of theater. Both look great on the big screen, but Vertigo really comes into its own as a richer and deeper picture.

    I think this is why most people find directors like Antonioni so boring, on TV their films really are boring. I hope this doesn’t sound too much like a film snob’s attitude, but it’s the only way to explain where I am coming from. My brain is wired for visual images, not sound or acting or dialogue.

    BTW, I am not just referring to “art films,” Titanic does a superb job telling a story with visual images—if only it was a silent movie!

    q, Those are very interesting points, especially about all his work being essentially one painting. I am a bit surprised by your comments on the little street, as I recalled that as a more subtle work, whereas TGWPE is more dramatic. I would have thought that the little street would be hard to reproduce. For instance all the repros of the “View of Delft” look horrible.

    Yes, I had a great repro of TGWPE, and it faded as well. That’s why I thought it reproduced well.

    I think the New York show is basically one picture from Holland (the girl pouring milk) and then some of the new York Vermeers.

    Thanks Lee.

    Thanks rob, The book is about the Great Depression, especially about the gold and labor markets, which I see as the key factors. I wrote it years ago, and am now trying to get it published.

    Those are interesting comments on Hitchcock. Of course I was half-joking in my Johansson remarks. And I love that Calvin and Hobbes line.

    I don’t know if anyone checked out the Chinese paintings I linked to, but they will hold up far better than the film they were in. Just the opposite of Vertigo. If Hitchcock had used something like the Richter portrait I linked to, it would have held up much better over time.

  23. Gravatar of Mark Caplan Mark Caplan
    17. November 2009 at 08:48

    Kim Novak also looked perfect for the part. But beyond that, she could also act; she wasn’t just an expressionless face with permanently parted, pouty lips. That said, a better painting like the mysterious and evocative portrait by zhang xiaogang you linked to would have raised VERTIGO to an even higher level of excellence. Too bad Hitchcock’s taste in art wasn’t commensurate with his taste in film music.

  24. Gravatar of Scott Sumner Scott Sumner
    17. November 2009 at 10:21

    Mark, Those are both good points. Once I started writing the post I started having second thoughts, that’s why I made it more humorous than I originally intended. It’s an idea that sounds good at first glance, but starts to melt under closer scrutiny.

  25. Gravatar of TheMoneyIllusion » Reply to Tyler Cowen, part 2 TheMoneyIllusion » Reply to Tyler Cowen, part 2
    2. January 2011 at 14:44

    […] 2000 page blog, they’d notice another theme—a critique of the economics profession.  In previous posts I observed that the Fed policy was usually close to the consensus of macroeconomists.  […]

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