Making economists better economists

The Economist has an editorial on the need to find new ways to teach economics. That may be a polite way for them to edge back from their wholehearted support for Keynesian demand management. This is how their editorial, titled “Keynes’s new heirs”, begins:

FOR economists 2008 was a nightmare. The people who teach and research the discipline mocked by Thomas Carlyle, a 19th-century polemicist, as ‘the dismal science’, not only failed to spot the precipice, many forecast exactly the opposite—a tranquil stability they called the ‘great moderation’. While the global economy is slowly healing, the subject is still in a state of flux, with students eager to learn what went wrong, but frustrated by what they are taught.

Alas, The Economist doesn’t get it and given its DNA-level Keynesian mentality may never get it. Anyone who can write the following is so far from having understood the last five years that you have to wonder where they have been:

Many think economic history should be more widely taught, citing the fact that Ben Bernanke’s Federal Reserve, influenced by his knowledge of the Great Depression and of Japan’s slump in the 1990s, outperformed rich-world peers.

If the management of the American economy is the best there is, an example to us all, even with the US experiencing the worst recovery since the Great Depression itself, you do have to wonder just how off the mark the folks at The Economist are. If they are really looking for some guidance on how economics should be taught, I have just the course for them. Alas, they don’t get it and are never likely to.

But as for teaching Economic History, I am all for that, but even more important would be teaching the History of Economic Thought. A bit of cross fertilisation with the ideas of economists from the past would go a long way to helping improve our stock of economists. If we keep sending them through the same dull texts and having our PhD students do nothing but statistical manipulation, the possibility of actually breeding a better class of economist will remain remote.

[My thanks to Jimmy for sending me the article from The Economist]

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