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Robert Lucas — an economist pretending to know

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Robert Lucas — an economist pretending to know We are storytellers, operating much of the time in worlds of make believe. We do not find that the realm of imagination and ideas is an alternative to, or retreat from, practical reality. On the contrary, it is the only way we have found to think seriously about reality. In a way, there is nothing more to this method than maintaining the conviction … that imagination and ideas matter … there is no practical alternative” Robert Lucas (1988) What Economists Do Sounds great, doesn’t it? And here’s an example of the outcome of that serious think about reality … In summary, it does not appear possible, even in principle, to classify individual unemployed people as either voluntarily or involuntarily unemployed depending on the characteristics of the decision problems they face. One cannot, even conceptually, arrive at a usable definition of full employment as a state in which no involuntary unemployment exists. … The difficulties are not the measurement error problems which necessarily arise in applied economics. They arise because the “thing” to be measured does not exist.

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Robert Lucas — an economist pretending to know

Robert Lucas — an economist pretending to know

We are storytellers, operating much of the time in worlds of make believe. We do not find that the realm of imagination and ideas is an alternative to, or retreat from, practical reality. On the contrary, it is the only way we have found to think seriously about reality. In a way, there is nothing more to this method than maintaining the conviction … that imagination and ideas matter … there is no practical alternative”

Robert Lucas (1988) What Economists Do

Sounds great, doesn’t it? And here’s an example of the outcome of that serious think about reality …

Robert Lucas — an economist pretending to knowIn summary, it does not appear possible, even in principle, to classify individual unemployed people as either voluntarily or involuntarily unemployed depending on the characteristics of the decision problems they face. One cannot, even conceptually, arrive at a usable definition of full employment as a state in which no involuntary unemployment exists.

The difficulties are not the measurement error problems which necessarily arise in applied economics. They arise because the “thing” to be measured does not exist.

Lars Pålsson Syll
Professor at Malmö University. Primary research interest - the philosophy, history and methodology of economics.

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