Skip to main content

Cookies and Privacy

We use cookies to improve your experience on our website. To find out more, read our updated Cookie policy, Privacy policy and Terms & Conditions

building blocks Myxi/Flickr

Putting Economic Models in Their Place

When policymakers turn to economists for guidance, they expect the advice they receive to be grounded in science, not academic factionalism or political presuppositions. Unfortunately, however, sound science is not always the driving force behind economic analysis and policy recommendations.

BERKELEY – When policymakers turn to economists for guidance, they expect the advice they receive to be grounded in science, not academic factionalism or political presuppositions. After all, the policies they will be putting in place will have real implications for real people. Unfortunately, however, sound science is not always the driving force behind economic analysis and policy recommendations.

In a recent critique of what he calls the “mathiness” of modern economics, Paul M. Romer of New York University argues that economists should take measures to exclude academic factionalism and politics from the dismal science. Romer grounds his case in an ongoing debate in his field about the role that ideas play in promoting economic growth.

Romer seems to be worried principally about some economists’ tendency to claim that what is true about certain types of theories is true of all theories and thus applicable to the real world. As an example of this tendency, Romer cites the work of the University of Chicago economist Robert Lucas, who, in his 2009 paper “Ideas and Growth,” dismisses the role that books or blueprints can play in driving growth. “Some knowledge can be ‘embodied’ in books, blueprints, machines, and other kinds of physical capital, and we know how to introduce capital into a growth model,” Lucas argued, “but we also know that doing so does not by itself provide an engine of sustained growth.”

We hope you're enjoying Project Syndicate.

To continue reading, subscribe now.

Subscribe

Get unlimited access to PS premium content, including in-depth commentaries, book reviews, exclusive interviews, On Point, the Big Picture, the PS Archive, and our annual year-ahead magazine.

https://prosyn.org/xq1EUiI;
  1. leonard52_Frank Augstein - WPA PoolGetty Images_borisjohnsonthumbsup Frank Augstein/WPA/Pool/Getty Images

    The End of the EU’s Brexit Bounce

    Mark Leonard

    After years of watching the United Kingdom muddle through a political crisis while enjoying an unprecedented level of unity among themselves, Europeans now must prepare for darker days. Negotiations over the future UK-EU relationship will inevitably divide Europeans and offer fodder to Euroskeptics.

    1

Edit Newsletter Preferences