I know next to nothing about how economists operate, yet they shape our economic policy. So, how rigorous is economics? Does it reach the level of rigour of physics, astronomy or chemistry? If not, why not?
It seems that any economic debate on the boards (and by extension, the Internet), doesn’t hinge on references to empirical evidence, but rather appeals to reason (i.e. you get claims of the form “but any increase in the minimum wage is bound to reduce an employer’s appetite for hiring, as they’d have to pay more!”). So, I suppose my question is, how empirical is economics?
I put this in GD because I suppose the topic could get contentious.
In many ways, it is both too rigorous and not rigorous enough.
Neoclassical economics (and rational choice political science) use relatively sophisticated mathematical and empirical tools. The econometrics and game theory are both state of the art.
Modern economics and political science are often too formal. If you open up, say, Positive Political Theory I by Austen-Smith and Banks, you will be treated to an endless parade of axioms, lemmas, theorems, and proofs. This text is a serious intellectual achievement and a great boon to the field. Hell, it is an intellectual achievement to read it, and I am glad I did.
However, despite the sophistication of the tools and methods, there are serious drawbacks to the neoclassical/rational choice approach.
Aside from behavioral economics, for the most part, we can’t do experiments. Theorists are inevitably backward-looking, and construct and test their models using data already available. These data can be extremely limited both in time and in scope. Simplifying assumptions are often made in econ/poli models that would probably never pass muster in a traditional hard science.
Due to these limitations, the result is often very tightly reasoned and highly formal work that yields wrong predictions or even no prediction at all. This is a very new discipline and there is a lot of really good work being done right now, but there are serious challenges to overcome.
For what it’s worth, economists do not set economic policy. A large subfield in formal political science studies why economic policies are so suboptimal even when all of the decision makers know better.
Don’t base your impressions of economics on the discussions here. There are a handful of posters who know what they’re talking about, and a lot more who only think they do.
Economics is a large discipline with many subfields. Some of them, particularly the most recent ones, are extremely empirical and scientific, and some of them are a little less so (although to be fair, it is a little difficult to run experiments involving large economies). When empirical data becomes available, there are always economists looking to see how well the theories fit it.
One of the more recent subdisciplines is behavioral economics, which begins with the observation that things don’t work exactly like classical economic theory would predict, and that people aren’t rational in the strictest sense. The question at hand is to what degree we’re rational, and how that affects the behavior of economic disciplines.
Sort of an aside from the OP - Wasn’t there an engineer a while back who thought economics wasn’t rigorous enough mathematically and decided he’d revolutionize the field by using Math! and Computer Models!… only to become a fairly crappy economist because economists were already using math and computer models and he never bothered to learn much about the basics of the field before trying to rigorize (;)) it? Does anyone know the name of that engineer?
But seriously, thanks to the OP for opening this thread. I have an interest in economics but no training for judging the merit of any given economic analysis or argument.
(Disclaimer: I am one of those who doesn’t know what he’s talking about)
I was under the impression (because my econ instructor said so) that most of the members of the Federal Open Market Committee are now academic economists. Is that not the case?
There is a wide difference between the monetary policy set by the Fed and the fiscal policy determined by the executive and legislative branches. The Fed doesn’t set tax rates.
I once dated a economics student, so I do know what I’m talking about. She was top of her class too, so I’m an expert. You can get a degree in economics with almost zero mathematics. On the other hand, some of the math (which is what I studied) is very advanced and difficult, taking in a lot of statistics. Similar to thermodynamics I remember thinking at the time.
I am not sure what you would consider zero math to be, but an Undergraduate degree in Economics typically qill require a course in calculus, a course in statistics and a course in econometrics (applied economic math).
That final course is a pre-req for a lot of other courses where the math will be used and reused.
I didn’t study economics as an undergrad, but don’t you also need at least a course in game theory as well? That presupposes calculus, and, depending on its depth, real analysis.
And good luck doing econometrics without linear algebra.
Which school? I have a degree in engineering from MIT, my daughter has a degree in economics from the University of Chicago, and she had a lot more and harder math than I ever did.
Some behavioral economists pride themselves on not caring about the math. Most are pretty good at it.
As for the OP, physicists study the interactions of a large number of particles that operate by simple rules. Economists study the interactions of a large number of people who don’t. Saying that you don’t get the same level of certainty in the results doesn’t mean that it is not rigorous.
Just to note that a lot of economists are trying to call this area “experimental economics” because it involves a lot of psych type lab experiments, unlike classical economics.
It’s a good thing to trot out when those of certain political persuasions say we don’t need regulations because people will always make rational decisions. Experimental evidence has proven that they don’t.
True. But what makes experimental & behavioral economics so incredibly interesting is that people do tend to act “irrationally” in rather predictable ways. It will take more time and scholarship to integrate the results of experimental economics into rational choice models and games, but hopefully, this will be the way of the world.
The crappy state college I went to requires Calc I and Stats I for Econ majors. That’s it, not a hell of a lot of math. But then, it isn’t the University of Chicago or MIT either. You aren’t ending up being an economist with a B.A. from the Minnesota State College system - not unless you go to grad school.
