Just how do economists reach their conclusions?

Here’s a primer:

Let’s start with how economists reach our conclusions. Non-economists might be forgiven for presuming that we construct our arguments in the same way that they do: apply their preferred mixture of values and interests in order to decide whether or not they like a policy, and then assemble arguments to support that position. This might explain why many would view economists as opponents: by the simple act of disagreeing, aren’t economists making it clear that we don’t share the same values?

Except that’s not how we work. Our starting point is always a model: a stylized representation of how the economy works. Once we’re satisfied that we have a model that incorporates the main features of interest — this step necessarily involves a certain amount of subjective judgment — we compare what the model would predict if the policy were in place with what would happen without it. The difference between the two predictions is the effect of the policy.

After describing the problems that arise from this fundamental misunderstanding, the author (Stephen Gordon of the University of Laval at Quebec City) goes on to offer some suggestions about what can be done:

Clearly, economists can make a more concerted effort to explain to non-specialists what it is they are saying, and why. This isn’t a simple task — economics is a difficult and technical subject — and it’s made more complicated by the fact that there are any number of commentators who have built their careers on misunderstanding and misrepresenting what economists have to say.

But it would be easier if progressives made an effort to set aside their distrust of economists and actually listen to what we are trying to say. Yes, you may be forced to re-examine some long-held opinions, but is that really a bad thing? And you may be pleasantly surprised to learn that we too are preoccupied with finding solutions to the problems of poverty and inequality.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s