Is Economics a Public Good? How Would We Know?

by Mario Rizzo

What is the economic justification for using tax money to subsidize the production of economic research? The standard answer is that academic economists produce a public good. In other words they produce knowledge for which they do not charge and for which it is not feasible to exclude non-payers.

Let’s accept this basic paradigm and see where it takes us.

More Scholarship, Less “Science”

by Mario Rizzo

Once upon a time, in a land far away from New York civilization, a famous economist told a good friend of mine that “we” need more scientists and fewer scholars in the economics profession. He was serious.

This is the time of year that many Ph.D. dissertations are being defended in graduate departments of economcs. We have many would-be scientists and almost no scholars. I think we need more scholars and fewer scientists.

What is Truth in Science?

by Jerry O’Driscoll

In the “Annals of Science,” Jonah Lehrer asks “is there something wrong with the scientific method?” He poses the question in an article entitled “The Truth Wears Off” in the December 13, 2010 issue of The New Yorker (pp. 52-57). The problem is that across disciplines “claims that have been enshrined in textbooks are suddenly unprovable.”

It is a problem of being unable to reproduce results in subsequent experiments.  Even scientists who perform the original experiment cannot reproduce their own results.  The pattern is that, over time, results become less strong or even disappear.

The Amazing Brad DeLong

by Mario Rizzo  

I don’t know where Brad DeLong acquired his philosophy of economics. DeLong responded to an article by Jean-Claude Trichet, president of the European Central Bank, on “austerity.” The following is part of what the Financial Times edited out of the published version. DeLong posted it on his blog. He says there are two types of economists:  

“One type chooses, for non-economic and non-scientific reasons, a political stance and a political set of allies, and twiddles and tunes their assumptions until they come out with conclusions that please their allies and their stance. The other type takes the carcass of history, throws it into the pot, turns up the heat, and boils it down, hoping that the bones and the skeleton that emerge will teach lessons and suggest principles that will be useful to voters, bureaucrats, and politicians as they try to guide our civilization as it slouches toward utopia. (You will not be surprised to learn that I think that only this second kind of economist has any use at all.)”  

The Failure of Macroeconomics

by Mario Rizzo  

The current issue of The Economist has a very interesting article on the turmoil among macroeconomists (“The Other-Wordly Philosophers”). Essentially, the article argues that although the dominant macro model, dynamic stochastic general equilibrium theory [DSGE], appears to be in a state of near-total breakdown, there is no agreement among economists as to what should replace it.

“Would economists be better off starting from somewhere else? Some think so. They draw inspiration from neglected prophets, like Minsky, who recognised that the “real” economy was inseparable from the financial. Such prophets were neglected not for what they said, but for the way they said it. Today’s economists tend to be open-minded about content, but doctrinaire about form. They are more wedded to their techniques than to their theories. They will believe something when they can model it.”  

What is a “Prominent” Economist?

by Mario Rizzo

In a recent article in Time magazine Michael Kinsley implies that no “prominent” economist has come out against economic stimulus as a (partial?) solution to the current mess. My interest here is not whether this true but in what constitutes “prominent.”