Exciting economics is often misguided economics

 [[{“value”:”In my latest Bloomberg column, I weigh in on the issues surrounding the latest David Deming piece in The Atlantic.  Here is one excerpt: …economics is a relatively mature science, and even surprising results are typically consistent with the laws of supply and demand. Innovations tend to be subtle — they could also be described,
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In my latest Bloomberg column, I weigh in on the issues surrounding the latest David Deming piece in The Atlantic.  Here is one excerpt:

…economics is a relatively mature science, and even surprising results are typically consistent with the laws of supply and demand. Innovations tend to be subtle — they could also be described, less generously, as underwhelming — concerning the relative size of effects. So it is hard for radical new ideas to come out of nowhere, and that does lead to some geographic concentration, centered in the highest-reputation schools…

Can economics come up with truly novel remedies or ideas? Probably not. If there is a recession, or say hyperinflation, there is a standard kit of tools involving monetary policy, fiscal policy, deregulation and some other policy changes. Economists can and do argue about the right mix of those policies in a particular case. But there is no “new drug” waiting to be discovered.

And:

As for microeconomics, if there is too much traffic on a highway, congestion pricing usually works. If there isn’t enough housing, deregulating construction or eliminating rent control are worth a try. No brilliant outsider will come along and say, “The way to get more housing is for everyone to drink two shots of vodka,” or some other novel or wild idea.

The point is not that economists have all the answers. It’s that we have a pretty exhaustive list of possible remedies.

And in sum:

The good news is that economists have already achieved a lot. The bad news is that a lot of the remaining work is doomed to be pretty boring and marginal. So one lesson is simply to appreciate the dullness of economics, because exciting economics is often misguided economics.

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 Economics, Science, Uncategorized