Thursday, March 1, 2007


Economics occupies a unique role in the array of sciences in that no other science suffers from such a chasm between the academic literature and the public discussion. Now, obviously, there isn't a whole lot of public discussion in chemistry or science, but there certainly is in pyschology, and I tend to see a lot of journal references in those debates.

Economics, not so. The premier journals - American Economic Review, Quarterly Journal of Economics, are dense texts filled with mathematical notation. Grad studies in the dismal science discuss metric spaces and topology. Public debate is often characterized by politicians spouting on about building bridges or the restoration of lost jobs, with scant reference to economic theory.

Regression analysis, however, has got to take the cake. How many times is the average Canadian presented with a nicely drawn line piercing a scatter diagram? Or told that results of a survey are accurate to 3%, 19 times out of 20? The multiude of assumptions that are made to invoke statistical results, the amount of adjustment and transformation that the data has been subjected to is beyond belief. It is a truism of econometric practice that if the data are tortured enough, the desired result will follow. What's worse is that the econometric theory is often ignored in conducting said analysis, creating results that are horribly biased.

A different split, but a disconnect nonetheless, has existed in my academic career. In the classroom, economics is portrayed almost exclusively through graphs. Pick up a journal, and the odds you'll find a graph in a theoretical article? Slim.

I just can't reconcile why academic economics is so removed from a public that talks at no end about economics. We've tried some rapprochement, most notably through the central banks, interest rates, and inflation. But in every other sphere of human activity - and human activity is economic activity - people with no formal training seem perfectly content to prattle on about cost-benefit analysis, government budgets, and especially unemployment and related fiscal policy.

As much as I can't explain the split, I can bemoan it. It's time to get professionals into the public sphere.

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