The main event today was a debate on the topic that economics education needs saving. To me the debate revealed that the desire for change is widespread amongst the old and young alike within the discipline. What is not clear is agreement on an alternative - everyone wants to do 'something else', but agreeing on what that something else might be is a task never quite tackled systematically by potential reformers.
In my mind Rethinking Economics and Post-Crash have most clearly articulated an alternative pluralist, dare I say it, scientific, core. But few seasoned economists are willing to make such radical change. Opening the doors to cross-disciplinary research is scary. Alternative methods might just prove superior to the equilibrium representative agent models that dominate economics.
As a small example of just how hesitant even the relatively ope minds are in economics, when discussing that direct surveys of firm managers and anthropological-style observational studies of firms are a valid method in micro-economics (ala Alan Kirman) I was faced with the following response:
But how do we know that respondents would tell the truth? That's the power of models and various regression tools. We know the assumptions being madeBut of course, most data that gets into these estimations is the result of a survey asking people to self-report their views, their income, their expenditure, and so forth. This response (from someone I respect white a great deal who is an excellent experimenter) simply reveals the narrowness of economics training.
To ram home the point, when Alan Blinder did actually send researchers to go and ask questions of firm managers and observe their decisions, his results, summarised in his fantastic book Asking About Prices, has had little relatively little impact on the profession. As Steven Keen writes in his review on Amazon
The chief author of this book is Alan Blinder, once a Vice-President of the American Economic Association, a Vice-Governor of the Federal Reserve, and currently President of the Eastern Economic Association. He is, in other words, no maverick, but firmly within the mainstream of economic thought. And yet the research he reports in this book challenges many of the accepted tenets of both micro and macro economics.
The publication should therefore be taken seriously by the economics profession, and raked over carefully to find out whether what Blinder reveals is really the case, or simply a product of poor research.
It speaks volumes for the way that economics handles contrary evidence to accepted beliefs that this has not happened. Blinder's book has instead simply been ignored. The book languishes around the 750,000 mark in Amazon's "best sellers" list, and this review will be the first ever given of it. Meanwhile Mas-Colell's Microeconomic Theory, published three years before Blinder's book, which states the accepted neoclassical microeconomic canon in excruciating mathematical detail, ranks in the mid 100,000s, and has over 80 reviews--most of them from economics PhD students and highly laudatory.We'll see what Wendy Carlin, author of INET's CORE Economics project, has to say about it all on Friday.
Another productive chat was whether the core economics program could do away with supply and demand diagrams and market equilibrium altogether. Thinking this far outside the current norms are what is really required for change. So you know, two of us believed an economics course could be even more valuable the current standard courses by doing away with supply and demand as currently formulated altogether.
In another session on how to improve your academic writing some quality advice was offered
Focus on the problem of interest, not the method.This resonated with me. I've long come to the realisation that economists have a small simple toolkit comprising equilibrium models of representative agents, who take that method to new problems, adopting the method across its infinite possible contortions to fit any problem - from reproductive choice, to education, and more. Even when vastly superior alternative are available. The simplicity itself, despite its irrelevance, seems to be quite attractive.
I had expected to be exposed more to new methods and new ideas but came away very much with the impression of the continued dominance of the core. One of the respected elders of the professions suggested we work together on a model of housing markets, but as soon as he talked about equilibrating forces of supply and demand I realised he hadn't actually thought about the housing market (crucially, the timing problems due to the real option nature of housing investment for landowners). Instead he was taking the method to a new area (for him at least).
More updates to come tomorrow.