Sunshine and Gloom in San Diego

The AEA and the Crisis of Expertise

Pictured above: INET discussion on pluralism in economics with INET senior economist Orsola Costantini and INET grantee Carlo D’Ippoliti (Sapienza University, Rome).

The ASSA is the annual gathering of the economics profession in the U.S., with thousands of attendees, and hundreds of sessions; it also serves as the job market for all recent PhDs. Just picture: hundreds of graduate students rushing from interview to interview, on their faces a mix hope and terror. And imagine professors and recruiters on a tight schedule to see all their candidates, worried to evaluate them fairly, and maybe, just maybe, make it to a session. I doubt the wonderful San Diego sun has ever gone so unnoticed.

For those who actually attended the conference, the climate was not exactly in tune with the weather either. Economics is facing serious challenges and the profession is aware. But to be aware does not mean to be prepared: change always is hard – especially for those who think they have some privilege to lose. Specifically, (white) men: currently a large majority. After the results of the 2019 survey of the CSWEP came out, the AEA could not just keep ignoring problems such as lack of diversity and pluralism, the narrowness of minds, themes, and approaches, and the pervasiveness of outright sexism. The debate this year was out in the open, which may just take us one step forward to a solution.

Even the booming Trump economy didn’t seem to inspire optimism, with economists (finally) admitting that we need serious fiscal stimulus. For us, that was not all bad. It gave us the always-welcome opportunity to say: We told you so!

And then, there we were, INET and YSI, with our booth, our staff, our research, our young scholars, our attending grantees…and, yes, our comfort goodies: the stress balls, and our super hip and ultra-popular tote bags with our tagline ‘Economics must serve humanity’ which, we dare to say, enveloped the ASSA conference foyers, reminding the attending crowd of their responsibility among the social sciences. As the UCLA economist Elham Saeidinezhad and former INET fellow put it on social media: ‘If you are attending the conference, and become discouraged about the culture and content of the field, this booth will be your sanctuary’.

Senior Economist Pia Malaney at our reception stressed the point further: “INET incubates new economic thinking within the academy, encouraging the exploration of heterodox ideas to overcome blind spots within the field.”

With much less scientific aspirations than the CSWEP survey, just like last year we set up our own poll. The theme: ‘Crisis of Expertise’.

So what did the results reveal about the state of economics, and what economists thought about it?

Economists who participated to the poll overwhelmingly find that the biggest societal challenges economics needs to address are inequality and climate change. After years of total silence, some studies on inequality and distribution recently came to the forefront (in part thanks to the success of Piketty’s Capital in the 21st Century, based on the World Wealth and Income database which we are proud to have supported from the very beginning). But how equipped is the economics we are taught in school and that dominates the top journals to actually interpret the shocking empirical evidence? Perhaps the next AEA could deal with that. We already are.

Although exciting (while sobering) debates happen, studies of climate change and environmental degradation has been living a marginal existence within economics, and on the whole we hardly have a handle on this grand challenge with our dominant tool set of equilibrium analysis.

But if discontent and awareness exist and weigh on the morale, why do things not seem to change?

The answers to the second question of our poll on what are the biggest obstacles for economics to serve society better speak to core findings of INET research on the effects of the current publishing structures in economics. In one of the INET studies, James Heckman and Sidharth Moktan in “Tyranny of the Top Five finds that:

Relying on rankings rather than reading to promote and reward young economists subverts the essential process of assessing and rewarding original research. Using the T5 to screen the next generation of economists incentivizes professional incest and creates clientele effects whereby career-oriented authors appeal to the tastes of editors and biases of journals. It diverts their attention away from basic research toward blatant strategizing about lines of research and favored topics of journal editors with long tenures. It raises entry costs for new ideas and persons outside the orbits of the journals and their editors. An over-emphasis on T5 publications perversely incentivizes scholars to pursue follow-up and replication work at the expense of creative pioneering research since follow-up work is easy to judge, is more likely to result in clean publishable results, and hence is more likely to be published.

Several studies by George Akerlof, Marcella Corsi, Carlo D’Ippoliti, Jakob Kappeller, Giulia Zacchia and others shed more light on this issue. Read up on it on our collection here.

Robert Shiller answers the question of the day: Academic publishing structures distort incentives

The top results from our third question suggest that there is a demand for more real-world application and more history in economics education. These results resonate of what one of INET founders Bill Janeway formulated as a core marker for new economic thinking:

Four pillars of “new economic thinking” are ready to hand as markers:

  • Recognition that economic and financial decisions are necessarily made under varying degrees of uncertainty with respect both to their direct consequences and, more broadly, to the future environment in which those consequences will be realized.
  • Explicit effort to (re)integrate economic and financial studies – both theoretical and empirical - all the way up and down the structural hierarchy of society.
  • Reinstatement of the distribution of income and wealth as core subjects of economic and financial analysis.
  • Taking history seriously: “thick” history that reaches beyond quantitative data to take account of the evolution of the social and political and cultural contexts which condition economic and financial experience.

Our Young Scholars Initiative, made up of thousands of student and young researchers, was born as a bottom-up antidote to the narrowness of the programs aspiring economists end up in. A place to confront, exchange and learn, without geographical borders and pushing the new frontiers of knowledge forward.

So, as we can see, all is not well in the state of Denmark. But the exchanges and debates we saw unfold in front of our poll station, and the interest for our research told us to be hopeful. To be sure, we are already on to the hard but exciting, and most of all necessary and urgent, task of changing economic theory.

We start from our young scholars and from the work of our grantees. Here a list of grantees that attended the conference:

Robert Akerlof

Thomas Breda

Linda Bilmes

Agostino Capponi

Wendy Carlin

Beatrice Cherrier

Orsola Costantini

Flavio Cunha

John Davis

Arindrajit Dube

Gauti Eggertsson

Barry Eichengreen

Gerald Epstein

Steven Fazzari

Xavier Gabaix

James Galbraith

Michael Gofman

D. Wade Hands

James Heckman

Oscar Jorda

Graciela Kaminsky

Anton Korinek

Luc Laeven

Philip Lane

Trevon Logan

Petra Moser

Suresh Naidu

Julie Nelson

Manuel Pastor

Emmanuel Saez

Mario Seccareccia

Joseph Stiglitz

Engelbert Stockhammer

Lawrence Summers

Ahmed Tahoun

Harald Uhlig

Karine van der Beek

Joachim Voth

David Weil

David Weinstein

L. Randall Wray

Gabriel Zucman

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