Thursday, 20 September 2012

What’s the use of economics?

Asks Diane Coyle at the website. I think the most obvious answer would be its useful 'cause its fun! Generating utility sounds like a useful thing.

To me there are a few odds things in what Coyle has written. For example,
[ ... ] in a 2012 survey of economists in the Government Economic Service – the single biggest employer of economists in the UK – they described the two main areas of their work as the production of briefing material and the preparation of policy advice.
From what I can tell, here in New Zealand government departments want applied statisticians who can tell them that their prejudices are right and have a number to prove it!
Stephen King, Group Chief Economist at HSBC, put it: “Young economists arrive in the financial world with little or no knowledge of how the financial system operates.
This sounds a lot like saying "I've employed a physicist and he doesn't know anything about political philosophy". Would you really be surprised by this? I don't know but if you want people who are trained in finance shouldn't you employ people with degrees in finance and not in economics?
There was a strong consensus on the need to demote the role of theory and promote empiricism.
How much more theory hating can things get? The amount of theory most econ curses have these day is so small I'm not sure how it could be reduced any further without turning it into an applied stats course. I would argue the other way we need more theory, and less empirical stuff.

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