Economics is stale and worthless

This is the abstract for a paper on “The Focus of Academic Economics: Before and After the Crisis”.* As is quite obvious from watching Treasuries and central banks around the world, no one learned a thing. In fact, no one even tried to investigate. Economics as now taught is stale and worthless.

Has the global financial crisis of 2007ff had a visible impact on the economics profession? To answer this question we employ a bibliometric approach and compare the content and orientation of economic literature before and after the crisis with reference to two different samples: A large-scale sample consisting of more than 440,000 articles published between 1956 and 2016 and a smaller sample of 400 top-cited papers before and after the crisis. Our results suggest that unlike the Great Depression of the 1930s the current financial crisis did not lead to any major theoretical or methodological changes in contemporary economics, although the topic of financial instability received increased attention after the crisis.

Moreover, given the dating of the papers examined, no one has learned a thing from the absence of a recovery anywhere in the world in the decade following the GFC. Of course, what they learned after the Great Depression was Keynesian economics, which was a universally-understood fallacy among the entire mainstream of economic theory before 1936, accepted only by Marxists and economic cranks, but I repeat myself.

I might mention that I have just been sent the book description being used by my publisher for my next book which is on classical economics and how to understand it.

Economic theory reached its highest level of analytical power and depth of understanding in the middle of the nineteenth century among John Stuart Mill and his contemporaries. This book explains what took place in the ensuing Marginal Revolution and Keynesian Revolution that left economists less able to understand how economies operate. It explores the false mythology that has obscured the arguments of classical economists, providing a pathway into the theory they developed.

On this, let me again quote Senator Cameron from when I appeared before the Economic References Committee in 2009.

Why have the IMF, the OECD, the ILO, the treasuries of every advanced economy, the Treasury in Australia, the business economists around the world, why have they got it so wrong and yet you in your ivory tower at RMIT have got it so right?

Best question ever. My book will provide the answer.

* Ernest Aigner (Vienna University of Economics and Business); Matthias Aistleitner (Johannes Kepler University); Florentin Glotzl (Vienna University of Economics and Business); Jakob Kapeller (Johannes Kepler University). “The Focus of Academic Economics: Before and After the Crisis.”

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