Yes, Economics Is a Science
By RAJ CHETTY, NYT
CAMBRIDGE, Mass. — THERE’S an old lament about my profession: if you ask three economists a question, you’ll get three different answers.
This saying came to mind last week, when the Nobel Memorial Prize in Economic Science was awarded to three economists, two of whom, Robert J. Shiller of Yale and Eugene F. Fama of the University of Chicago, might be seen as having conflicting views about the workings of financial markets. At first blush, Mr. Shiller’s thinking about the role of “irrational exuberance” in stock markets and housing markets appears to contradict Mr. Fama’s work showing that such markets efficiently incorporate news into prices.
What kind of science, people wondered, bestows its most distinguished honor on scholars with opposing ideas? “They should make these politically balanced awards in physics, chemistry and medicine, too,” the Duke sociologist Kieran Healy wrote sardonically on Twitter.
But the headline-grabbing differences between the findings of these Nobel laureates are less significant than the profound agreement in their scientific approach to economic questions, which is characterized by formulating and testing precise hypotheses. I’m troubled by the sense among skeptics that disagreements about the answers to certain questions suggest that economics is a confused discipline, a fake science whose findings cannot be a useful basis for making policy decisions.
(More here.)
CAMBRIDGE, Mass. — THERE’S an old lament about my profession: if you ask three economists a question, you’ll get three different answers.
This saying came to mind last week, when the Nobel Memorial Prize in Economic Science was awarded to three economists, two of whom, Robert J. Shiller of Yale and Eugene F. Fama of the University of Chicago, might be seen as having conflicting views about the workings of financial markets. At first blush, Mr. Shiller’s thinking about the role of “irrational exuberance” in stock markets and housing markets appears to contradict Mr. Fama’s work showing that such markets efficiently incorporate news into prices.
What kind of science, people wondered, bestows its most distinguished honor on scholars with opposing ideas? “They should make these politically balanced awards in physics, chemistry and medicine, too,” the Duke sociologist Kieran Healy wrote sardonically on Twitter.
But the headline-grabbing differences between the findings of these Nobel laureates are less significant than the profound agreement in their scientific approach to economic questions, which is characterized by formulating and testing precise hypotheses. I’m troubled by the sense among skeptics that disagreements about the answers to certain questions suggest that economics is a confused discipline, a fake science whose findings cannot be a useful basis for making policy decisions.
(More here.)
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