Opinionated economists

This article by Gregory Clark is generated lots of discussion over the last couple of days. He starts by arguing that academic economics is riding high but that research appeared to be on some relatively obscure topics rather than the job of predicting the crisis that has befallen us. Moreover, the debate following the crash has focused on elementary economics. Clark asks: where is the more sophisticated analysis and agreement on key variables? These are all very legitimate questions.

However, it is one passage that seems to have generated the most discussion. [DDET Read on]

Recently a group of economists affiliated with the Cato Institute ran an ad in the New York Times opposing the Obama’s stimulus plan.  As chair of my department I tried to arrange a public debate between one of the signatories and a proponent of fiscal stimulus — thinking that would be a timely and lively session.  But the signatory, a fully accredited university macroeconomist, declined the opportunity for public defense of his position on the grounds that "all I know on this issue I got from Greg Mankiw’s blog — I really am not equipped to debate this with anyone."

And I can imagine that happening. Indeed, I have said similar things to various people, journalists and others all of the time. And I am no slouch on being opinionated. Even apart from the blog, I was in the press an average of once per day last year. But that hasn’t stopped me not wanting to comment on what the latest unemployment numbers mean and have passed the buck to various others on that. Eventually, there is a taker. And sometimes if people just wait, an opinion will form in my head.

I think academic economists are actually more engaged than ever as a result of this downturn. In contrast to Clark, I would be very surprised if the result doesn’t appear in the journals over the next few years.


One thought on “Opinionated economists”

  1. Self regulating markets that find equilibrium are fundamental to economic analysis.  Many (most) markets are not self regulating so why bother analysing them with tools that depend on equilibrium?

    The solution is likely to lie in making markets self regulating rather than regulated.  That is change the internal rules of dysfunctional markets (ones that display chaotic behaviour like the money markets and the share markets).  For example change the rules on how we create new money for the money market and make it easier for a company to increase and decrease the supply of shares instead of using price only to regulate demand.


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