Paul Krugman writes:
OK, several correspondents have weighed in on the story I’d heard about the economics department that abandoned econometrics because it was rejecting its models. It wasn’t quite as alleged, but close enough.
The department in question was the University of Minnesota. For those readers new to this discussion, “freshwater-saltwater” was a distinction originally due to Bob Hall, who noted that the economics departments that had rejected Keynes and anything reminiscent of Keynes were inland schools like Minnesota, Chicago, and Rochester, whereas the places that retained a belief in the usefulness of monetary and fiscal policy were places like MIT, Princeton, and Berkeley.
So the story as I now have it was that there was harsh conflict between the macroeconomic theorists at UMinn, especially Prescott, and the econometricians who had the nasty habit of showing that those models didn’t work. And for at least some period econometrics was dropped as a required course for the Ph.D. — I don’t know whether it has been restored.
Now that is pure madness…
There is no specific econometrics requirement for graduation, but most economists confront issues of extracting information from data throughout their careers, and the course sequence in applied econometrics will introduce you to some of the important issues in doing so. Moreover, econometrics faculty are unsympathetic to students who skip the course but then seek help with econometric issues in writing a thesis.