Monday, January 26, 2009

The Disputatious Science

Why don't economists agree? Does persistent disagreement among economists render all their advice meaningless? If both sides of an economics argument claim to possess empirical evidence for their position, how can a layman tell who's wrong?

Russ Roberts, an economist, takes a hard look at the disputatious science of economics in this podcast from Econtalk. Some of his conclusions:

First, it is extremely difficult to tease out one or two effects from a complex network of interactions. Yet, economists often charge ahead with the alarming phrase, "controlling for everything else."

Second, bad studies often overcome sound logic, especially when the studies confirm an established bias.

Finally, much of what is presented as empirical evidence is really sophisticated statistical analysis. In other words, economists sometimes mistake their math for the real world.

The counterpoint of the discussion is taken by Robin Hanson, another economist. Hanson says economics does offer a body of widely accepted knowledge that qualifies as science. He offers three possible explanations for the public squabbles:

1. What economists know might not be very useful in the real world
2. Economists like to focus their attention on the areas where they don't agree
3. Incentives distort the public dissemination of economic ideas

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