How to bring change in economics
Matt Clancy and John D. Davis look at how the science of economics has changed during the last 50 years:
On the applied turn in economics:
New paradigms to take root, need to get above a certain threshold. In general, this threshold is determined by just two factors: the superiority of the new paradigm and the extent of bias. The better the paradigm and less bias, the lower is this threshold and therefore the lower is the population of scientists that needs to be “converted” to the new paradigm for it to take root. The applied turn in economics looks reasonably good on these two factors.
But, argues John Davis, much empirical research actually contributes to accumulating a body of evidence, and is rarely seen as having ‘breakthrough’ status.
On the quasi-experimental methods:
In economics, the rise of quasi-experimental methods in the field probably arises partially from the presence of the policy world, which liked these methods and allowed them to take root. It was also important, however, that these methods credibly established their utility in a few key circumstances, and also that they could be framed in such a way that was consistent with earlier work.
On the way forward according to John Davis:
The histories of science and economics show that over time well entrenched paradigms are replaced by new thinking, the transition from Classical to Neoclassical economics being an example. My general argument, then, is that such transitions involve disciplines, temporarily and sometimes in the long run, becoming multidisciplinary and open to many approaches, whether those approaches originate within them or in other disciplines.
How a field fixes itself: the applied turn in economics
By: Matt Clancy – Iowa State University
Change in and changing economics
Author: John D Davis
From: University of Amsterdam
How views among economists have changed
There have been four surveys on the level of consensus among economists over a number of issues: in 1979, in 1990, in 2000, and in 2011. Geide-Stevenson and La Parra Perez conducted a similar survey in 2020 and discuss their results in a recent paper. They sent questionnaires to 8,100 members of the American Economic Association and ended up with 1770 usable responses. A large percentage (64%) of the economists who responded were employed in academia and 13% in government. Their results show that there is strong consensus on the following:
- Immigration generally has a net positive impact for the US economy;
- Climate change poses a major risk to the US economy;
- Addressing biases in individuals and institutions can improve equity and efficiency;
- Universal health insurance coverage will increase economic welfare.
There is slightly less agreement over:
- Whether differences in economic outcomes between whites and blacks are in large part due to discriminatory norms and are split on whether the United States provides sufficient opportunities for social mobility;
- The need of addressing corporate economic power;
- The efficacy of lab experiments and randomized control trials as research tools.
When compared to previous surveys:
[W]e find a significant increase in the incidence of strong consensus compared to surveys conducted in previous decades. Notable shifts in consensus center on the appropriate role of fiscal policy in macroeconomics and issues surrounding income distribution. Economists now embrace the role of fiscal policy in a way not obvious in previous surveys and are largely supportive of government policies that mitigate income inequality.
The blue line tracks 22 propositions common to all surveys. The orange line tracks 33 propositions common to the last three surveys. The gray line shows the percentage of 37 common propositions from the 2000 and 2020 survey resulting in strong consensus. For all subsets of identical propositions, it is obvious that the incidence of strong consensus increased substantially in 2020.
Consensus among economists 2020 – A sharpening of the picture
Authors: Doris Geide-Stevenson, Alvaro La Parra Perez
From: Weber State University
