by Summary:
Medicine is to science (biology) as public policy is to economics, that is, an application. Medicine based on evidence-based science is relatively successful in diagnosis, etiology and treatment of disease. Public policy based on conventional macroeconomics is nothing like that in approach or outcomes. If there were an economic science that proves itself relative to public policy, there would not be opposing political factions offering economic arguments to rationalize their conflicting positions. If the science were "decided" as claimed, the optimal policy would be demonstrable by theory and confirmed by evidence. That is far from the case. For example, the central bank is charged chiefly with maintaining monetary stability. Janet Yellen, the former Fed chair, recently admitted that
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Mike Norman considers the following as important: economics as science, macroeconomics, Simon Wren-Lewis
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Medicine is to science (biology) as public policy is to economics, that is, an application. Medicine based on evidence-based science is relatively successful in diagnosis, etiology and treatment of disease. Public policy based on conventional macroeconomics is nothing like that in approach or outcomes. If there were an economic science that proves itself relative to public policy, there would not be opposing political factions offering economic arguments to rationalize their conflicting positions. If the science were "decided" as claimed, the optimal policy would be demonstrable by theory and confirmed by evidence. That is far from the case. For example, the central bank is charged chiefly with maintaining monetary stability. Janet Yellen, the former Fed chair, recently admitted that
Topics:
Mike Norman considers the following as important: economics as science, macroeconomics, Simon Wren-Lewis
This could be interesting, too:
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If the science were "decided" as claimed, the optimal policy would be demonstrable by theory and confirmed by evidence. That is far from the case. For example, the central bank is charged chiefly with maintaining monetary stability. Janet Yellen, the former Fed chair, recently admitted that there is no satisfactory theory of inflation, so the central bank must operate based on discretion rather than a rule.
As a result there is seldom agreement among the committee or the economists it relies on regarding setting the policy rate. They make an "informed decision" (guess) after joint inquiry and deliberation (although the committee generally follows the lead of the chair). This is the command system that purportedly sets the most important factor in economic policy according to conventional economics.
Given the dismal record of the central bank continuously hitting its targeted policy rate while also maintaining growth, price stability and full employment (even defined down) seriously questions the so-called science behind the process. This is wizardry rather than science, prediction rather than forecasting.
Simon Wren-Lewis doesn't understand this?
If medicine were like economics, seeking medical treatment would be like going to a witchdoctor.
Lars P. Syll’s Blog
Wren-Lewis insults medical science
Lars P. Syll | Professor, Malmo University