DO ECONOMISTS KNOW ANYTHING?

DO ECONOMISTS KNOW ANYTHING? The title of this article appears to be asking simply “Do economists know any more than us?”, but it’s really asking whether economists know anything at all. A friend of mine who is an economist e mailed me the article without comment. The article focuses on the failures of economists in making predictions, especially failures in predicting the current economic crisis, but for me the most damning sentences in the article are these: “A survey conducted among the economics departments of MIT, Harvard and Stanford reveals that most young economists place overwhelming trust in mathematics. (A ‘broad knowledge of the economy’ seemed important to only 3 per cent of respondents, whereas to 68 per cent it seemed unimportant.)” As for the failure to make good predictions, predictions are very important and economists do not have a good record. Taleb quotes an economist who ran three competitions among econometricians and concluded: “statistically sophisticated or complex methods do not necessarily provide more accurate forecasts than simpler ones.” Taleb’s explanation for economists’ failure to make good predictions is: “The world is far too complicated for their discipline.”