And more from this week...

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On a feature panel at the American Economic Association’s annual conference last Friday, I spoke about the “great level of concern that economists have not done a very good job over the past 25 years advising policymakers… All of which has led to a situation where I think people rightly look at what economists are recommending and say, why on earth should we expect that to be true?”

This prompted a very interesting discussion, which the New York Times highlights in your one thing to read this week: Economists Are in the Wilderness. Can They Find a Way Back to Influence?

“When economists gathered in San Francisco this month for the annual meeting of the American Economic Association,” writes Ben Casselman, “there was a sense that their famous confidence — critics would say arrogance — had been, if not shattered, certainly dealt a body blow. What was the point of their careful data-gathering, their complex models, their intricate theories if no one was going to listen to their advice anyway?”

What follows is a remarkable psychological study of a profession in crisis. A few of the quotes from the story:

  • “We’ve always been bad at forecasting. … Does that hurt our credibility? Probably.” – Greg Mankiw, Harvard University
  • “It matters that the profession has failed society in a couple of ways. I think it’s important that when policy goes awry, people own up to what happened.” – Karen Dynan, Harvard University
  • “We’re all sitting up here trying to diagnose what went wrong. I do feel that, as a profession, our understanding of inflation is not nearly where it needs to be.” – Christina Romer, University of California
  • “Economists need to do a better job about understanding the problems people care about, about being innovative in developing approaches to them and about being clear about uncertainty.” – Jason Furman, Harvard University
  • “Before there was more of a sense of ‘all economists say X,’ and now I don’t think you can necessarily say that.” – Ioana Marinescu, University of Pennsylvania

But my favorite part is a pair of paragraphs from Casselman, printed back to back, attempting to rebut my own critique:

Continue reading at Understanding America
Oren Cass
Oren Cass is chief economist at American Compass.
@oren_cass
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