Monday, January 7, 2013

Economics and Ideology

As opposed to the world's great religions,
Economics is free from divisions
(Except for the few
Applicable to
The really important decisions).

Economists from around the country and the world converged on San Diego this past weekend for the American Economics Association annual meeting.  Among them was Paul Krugman, who would take part in a panel discussion of "What Do Economists Think About Major Public Policy Issues?"  The discussion centered on a paper by UC San Diego economists Roger Gordon and Gordon Dahl, which subjected the question of "Professional Consensus or Point-Counterpoint" among their peers to statistical analysis.  Gordon and Dahl concluded that professional consensus does indeed exist, and that much of the disagreement is not ideologically driven. As preparation for his part in the discussion, Prof. Krugman published a New York Times blog post in which he concluded that, while consensus may generally reign in the Dismal Science, a statistical approach may overlook the at-times virulently ideological disputes that arise in the biggest and most consequential matters.  These include questions such as whether "the benefits of the American Recovery & Reinvestment Act exceeded its costs."  (I.e., was the stimulus worth it?)

The panel also included the University of Michigan's Justin Wolfers, who offered a milder interpretation.  Although Prof. Wolfers' analysis also showed an ideological basis for economists' opinions on the stimulus bill, he nevertheless could not conclude that, on the whole, responses to a broad range of policy questions are statistically correlated to ideology.  May there yet be hope for rationally based policy?

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