economics as faith (9)

Economists are not always wrong; nor does the real problem lie with dodgy data. The mistake comes when policy makers invest the findings of a faith-based discipline with the certainties of science. They would do better to rely on common sense and observed behaviour.

Philip Stephens, “The New Deal for Europe: more reform, less austerity“, Financial Times 26 April 2013.

FT columnist Philip Stephens is commenting on controversy surrounding errors found in the work of Harvard professors Carmen Reinhart and Kenneth Rogoff. His statement is interesting, even though the second sentence contains an error. Certainties are characteristic of faith, not science. Faith-based statements by definition cannot be proven wrong. The conventional wisdom of science can always be overturned with new data, or new ways of examining old data.

Reinhart and Rogoff, in a NY Times op-ed, emphasise that they are scholars, not faith-based economists. They learn from errors and seek to advance science, but cannot prevent others from using their work to support political causes.

[W]e view ourselves as scholars, though obviously given the prominence of book [sic], and the extraordinary circumstances of the financial crisis, politicians will of course try to use our results to advance their cause. We have never advised Mr. Ryan, nor have we worked for President Obama, whose Council of Economic Advisers drew heavily on our work in a chapter of the 2012 Economic Report of the President, recreating and extending the results.

In the campaign, we received great heat from the right for allowing our work to be used by others as a rationalization for the country’s slow recovery from the financial crisis. Now we are being attacked by the left — primarily by those who have a view that the risks of higher public debt should not be part of the policy conversation. Above all, we resent the attempt to impugn our academic integrity. Doing archival research involves making constant judgments and yes, on occasion, mistakes. Learning from them is how science advances. We hope that we and others can learn from ours.

Carmen M. Reinhart and Kenneth S. Rogoff, “Responding to Our Critics“, New York Times, 25 April 2013.

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