Last year I had the privilege of meeting one of America's best governors. This man has decades of experience with government budgets, fiscal policy and economics - or, more appropriately, with economists.
When I told him what I do for a living, he said: "You know God invented economists to make astrologers look better". I chuckled and had a good few minutes conversation about the federal budget and the case for a balanced-budget amendment.
The governor's tongue-in-cheek attitude may cause a few good laughs, but there is more than a grain of truth behind it. When I started as a measly undergraduate in economics back in the 1980s I learned theory, reasoning, methods of analysis and even some history of economic theory and policy. And then we learned the mathematical and statistical methods.
My professors, in turn, were "raised" as economists on a diet of Paul Samuelson, John Hicks, John Maynard Keynes, Milton Friedman, Franco Modigliani and Jan Tinbergen. If you recognize more than two of these names, you know your economics pretty well. If not, I don't blame you. If you took any economics in college you probably started with a graph with a supply curve and a demand curve, went on to multivariate regressions and then wrote a thesis in econometrics.
Again, nothing strange with that. That is what economics has been reduced to. In essence, the problems that matter to economists these days are those that can be analyzed within the realm of econometrics or optimization theory.
The problem is that most economic problems in the world do not lend themselves to such strict, deductive quantitative reasoning. They require far more complex analytical approaches, with a methodological openness that sometimes - but far from always - clashes with rigorous, deductive methods such as econometrics.
Economics has essentially become methodologically single-minded. This has allowed economists to present their science as "rigorous" with a perceived comparability to natural sciences. However, it has also led economists to shy away from societal and policy problems that do not lend themselves to econometrics. Issues that economists historically took on with dedication and passion are now left untouched.
This blog will discuss some of those problems and how economists can indeed make meaningful contributions where rigor and regressions have no immediate role to play. It is essential that we, the practitioners of the science of economics, return our profession and academic discipline to a broader field of usefulness where we used to participate.
If economists abandon the social sciences; if they continue to narrow the scope of problems they think their science can tackle; then society as a whole will suffer tremendously. Already now, with the level of rigor and analytical confinement that exists within economics today, there are very troubling examples of that suffering.
The problem is that most economic problems in the world do not lend themselves to such strict, deductive quantitative reasoning. They require far more complex analytical approaches, with a methodological openness that sometimes - but far from always - clashes with rigorous, deductive methods such as econometrics.
Economics has essentially become methodologically single-minded. This has allowed economists to present their science as "rigorous" with a perceived comparability to natural sciences. However, it has also led economists to shy away from societal and policy problems that do not lend themselves to econometrics. Issues that economists historically took on with dedication and passion are now left untouched.
This blog will discuss some of those problems and how economists can indeed make meaningful contributions where rigor and regressions have no immediate role to play. It is essential that we, the practitioners of the science of economics, return our profession and academic discipline to a broader field of usefulness where we used to participate.
If economists abandon the social sciences; if they continue to narrow the scope of problems they think their science can tackle; then society as a whole will suffer tremendously. Already now, with the level of rigor and analytical confinement that exists within economics today, there are very troubling examples of that suffering.
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