by From Asad Zaman I was professionally trained as an economist, and learned how to build models with the best. As described in detail in a previous post on “The Education of An Economist“, it was only by accident that, a long time after graduate school, I learned of glaring conflicts between the theory I had been taught, and the historical evidence about effects of free trade and trade barriers. Further exploration along this direction dramatically widened the chasm between the economic theories I had learnt, and the historical and empirical evidence all around me. This led me to a set of puzzles which I have been struggling with for the past two decades. [1] Why is that economists are not aware of the conflict between economic theories and empirical evidence? [2] Why is it that
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from Asad Zaman
I was professionally trained as an economist, and learned how to build models with the best. As described in detail in a previous post on “The Education of An Economist“, it was only by accident that, a long time after graduate school, I learned of glaring conflicts between the theory I had been taught, and the historical evidence about effects of free trade and trade barriers. Further exploration along this direction dramatically widened the chasm between the economic theories I had learnt, and the historical and empirical evidence all around me. This led me to a set of puzzles which I have been struggling with for the past two decades. [1] Why is that economists are not aware of the conflict between economic theories and empirical evidence? [2] Why is it that economists do not care, when such conflicts are pointed out to them? In “Trouble With Macro“, Romer expresses these same two points as follows: “The trouble is not so much that macroeconomists say things that are inconsistent with the facts. The real trouble is that other economists do not care that the macroeconomists do not care about the facts. An indifferent tolerance of obvious error is even more corrosive to science than committed advocacy of error.”
Once we move from the easy-to-establish fact that economists use crazy models, to the much more difficult meta-question of WHY economists use crazy models, . . . read more