Wednesday, December 9, 2009

What Good Are Economists Anyway?

Peter Coy wrote an interesting piece that began thus:

Economists mostly failed to predict the worst economic crisis since the 1930s. Now they can't agree how to solve it. People are starting to wonder: What good are economists anyway?

And, he ends his piece thus:

What, then, is the way forward? Once this crisis is past, the next agenda for macroeconomists will be to help make the economy far more robust—enough to survive the blunders of politicians, bankers, and economists of the future. Taleb, the scholar of unpredictability, notes that nature achieves robustness through a redundancy that economists would consider wasteful: two hands, two eyes, etc. Blake LeBaron of Brandeis University suggests preventing huge crises by tolerating small disturbances, the way foresters use controlled burns to eliminate flammable underbrush. Perhaps out of the ashes of failure will emerge a better macroeconomics profession.

Having given you the Alpha and the Omega, to read everything that Coy wrote in between, click here.


walla said...

A good article. Thanks.


etheorist said...

Economists suffer similar job problem as doctors, in being asked to defy mortality of the economy and the body, respectively.

walla said...

de minimis said...

bro walla

You're welcom and, thanks.

Guru etheorist

It's a tough gig. The bastards will ignore economists during the good times when they can light cigars with hundred dollar bills and swig bottles of 100-year old whisky with nary a thought. When shit happens they blame the economists for being poor oracles. Such is the plight of the honest economist :D

donplaypuks® said...

With due apologies, here are some classic rippers about economists:

1. An economist is an expert who will know tomorrow why the things he predicted yesterday didn’t happen today.
— Laurence J. Peter

2. Economists forecast 9 out of the last 5 recessions.

3. The First Law of Economists:

For every economist, there exists an equal and opposite economist.

The Second Law of Economists: They’re both wrong.

And of course the winner is none other than our man Mamak Robokop Forexloosecannon from who shortly before GE2008 announced that M'sia's GDP had increased by 40% in 4 years!!

We are all of 1 race, the Human Race