To be relevant, economists need to take politics into account
This article details the importance of integrating economic models with politics or process. This allows models to be more comprehensive and predictive when it comes to explaining economics in the real-world. Recently, the push has been to incorporate this into the American Economic Association Conference so researchers can be on the forefront of discussing and disseminating this information. Many economist think that these political issues are often outside the scope of their research and it is not realistic to include them.
This article sheds light on some potential shortcomings of the current research pertaining to economic research that coincides closely with policy. However, it seems that much of these issues are tremendously complex, so adding more variables to the mix may only dilute the current research. Particularly, when it comes to macroeconomics and trying to sift out causal relationships amongst a vast system of institutions and players. I am curious to see how economic models with a policy bent will fare in strengthening the existing research...
To be relevant, economists need to take politics into account http://www.economist.com/news/finance-and-economics/21714363-advent-trump-administration-finds-economics-profession-crisis
7 comments:
President Trump is creating a new culture in Washington and always voices his opinion whenever someone tries to report negative news about him. He has come out and said he doesn't want reporters in the White House and it will be harder to gain information on the policies being put in place by his administration. So this is a time for economists to voice their opinion on certain policies that will hurt or help the economy, even if they receive a backlash from the Trump administration. It will be interesting to see if economists will do more research with politics involved and voice their opinion on policies put in place by this new administration.
Yeah good point. It will be interesting to see if Economist will be able to bridge the gap between their work and politics effectively under the new administration. I imagine collaborative efforts between economist and politicians might best provide the most data for research economists are exploring. With the potential for there to be such stark changes in policy under the new president, we have the opportunity of observing what the impact will be on various economic practices.
The balance between economics and politics has always been a tenacious relationship, but it's important to note when looking at economics. We study "econs" rather than people in economics, but the psychology of a human being is far from the rationale assumption we use in economic theory. I'm interested to see if economics can evolve to adapt politics or preferably if politics will adapt to economics a little more.
Yeah, I think Comparative Economic Systems is a good course to take regarding this topic. As far as merging the two topics, this, i'm guessing, is the best course at OWU. I certainly think psychological aspects should be well integrated into these models if they aren't already. For one, loss aversion may prove a good example of how policy makers are more resistant to ending current polices compared to adding new ones.
I think you make a really good point, Greyson, when you say we study the system and not necessarily the individual human beings within the system. I too am interested to see where the relationship goes from here. I have to admit, I am a little cynical at the thought of much collaborative effort between politicians and economists without some real incentive for both parties. On the other hand, the article made a really interesting point; "Besides modelling an economy where machines do 100% of the work, it might be worth thinking through the potential political effects of a world in which, say, 20% of working-class adults are deprived of good, meaningful work." A skyrocketing unemployment rate could be just the incentive economics needs to embrace politics as a variable, or vice versa. Who knows? Hopefully there's a happy medium.
I agree with Ben Simpson, there's this growing sense that President Trump wants to form a government filled with people who lack the qualifications to make certain policy decisions, but will make decisions that will align with the interests of the president rather than challenging him. Adding more variables wouldn't be just much of an issue because if you run a regression analysis you can use the corresponding p-values to cross out which variables are not significant and then focus more on those that are to make more concrete conclusions about certain policies. It'll be interesting to see what direction the Trump administration will take on this issue in the first 100 days in office.
I agree, Economist should be well aware about what is happening in politics. Especially under Trump's administration there might be some type of legislation that might affect many businesses/organizations. Economist need to be aware of the legislation that will be approved and will be affecting many business. Businesses need to be aware about the legislation that will be imposed because they need to prepare for the future. They need to know how their businesses will be affect and prevent any things that might affect them.
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