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Two factors shaping the economics profession today
I see two significant long-term trends, both of which are probably unstoppable:
1. In percentage terms, fewer and fewer economists are Americans by birth and upbringing. Non-Americans are less likely to be fully fluent in English, which encourages mathematics. Non-Americans also tend to be less market-oriented in their thought. In any case they are less likely to stand along traditional U.S. ideological fault lines or even share ideological fault lines with each other.
2. Empirical work has a shorter half-life than does theory, at least on average. Yet most people today, including at top schools, do empirical work. There will be fewer giants and more middling-size figures of temporary import. If you tenure a top empirical economist, what does your department look like when he or she is 60? What percentage of these people are skilled enough, or care enough, to continue reinventing themselves? Maybe some top departments won't look so top in twenty years' time.
I believe also that the higher relative status of empirical work favors the status of women in the economics profession.
Field experiments have a longer half-life than regressions, precisely because they are so costly to redo.
Posted by Tyler Cowen on October 30, 2009 at 07:16 AM in Economics | Permalink
Comments
Can you back those statements up with empirical data, please?
Posted by: C at Oct 30, 2009 7:40:02 AM
As a German, I am per-nature pessimistic (or realistic) about all things in life. And unlike Americans I already feel the impact of left-of-center Academia and it's understanding and interpretation of economics. But it's less the leftism I fear in economics, but the stream-lining of economic subjects and discourse. I believe that in the future we will see even less critical debate between trench lines (if trench lines still exist). This is mainly due to the politization of speech codes and group thinking on campuses.
In Germany, that still has an institute in memoriam of Hayek at Freiburg, you will ever only see a Stiglitz but never a Tullock. There is no argument outside of welfare-state economics and strong government ideas. All criticism rests intra-system and never breaches the borders to be really radical.
And the sad truth is that economists here are still more liberal (in the classical sense for you Americans) in regard to the general population and its leading intellectuals. What we see here is a homogenity of what are "good" and "clean" ideas. And this I find a sad state of affairs...
Posted by: Max at Oct 30, 2009 7:53:14 AM
#2 is really interesting - the tenure structure changing rankings.
Posted by: Michael Tinkler at Oct 30, 2009 7:59:49 AM
My Chinese adviser discouraged me from doing math modeling because when he saw a class it was always full of Asians. I thought to myself, I should discourage him from economics.
Posted by: Andrew at Oct 30, 2009 8:00:52 AM
1. Faculty members pick would be faculty members. My observation is that mathematical theoreticians pick empricists who support their world view, and not those who do not share their world view. So, instead of diversity of views, what you get is complementary competencies supporting the same world view.
What is interesting is when an entire field shifts, and the department is of the homogenous world view. The lack of diversity in world views makes it difficult for the department to attract new talent, because it is viewed as inhospitable.
That's where higher level management at the dean level is necessary to make sure there actually is diversity.
2. What is also missing from the discussion is department funding sources and academic consulting opportunities and practices. I see too many faculty members bending their research and writing towards the lucre. In my area, antitrust, IO economists, through the consulting firms that hire them, have quite clearly developed their research towards ares where there is consulting and litigation value. This is very apparent when you compare European IO with US IO economists: Europeans, in my view, are a bit more honest, more willing to question Chicago orthodoxy with some really strong theory, supplemented by game theory, such that the Europeans like Tirole and others, have become the thought leaders in ways that we never would have expected.
Posted by: Bill at Oct 30, 2009 8:24:20 AM
So Dr. Cowen, where does GMU stand on the empirical scale? Would you say there are more philosophically-minded professors there?
I have thought for the past few years that GMU has a great faculty and is ripe to shoot up the econ phd rankings.
J. Daniel Wright
Posted by: J. Daniel Wright at Oct 30, 2009 8:31:17 AM
First off, you should celebrate the reduction of Americans among top economists. It means your field is becoming internationally competitive, which means you're drawing better talent. (If you go to a conference in say physics, you'll find the vast majority of people are not natural-born Americans.)
If "empirical work has a shorter half-life than theory," then it's just an odd quirk of the sociology among economists, and will change in the long run. Think about it. This is why scientific understanding is so persistent -- for instance why we still teach Newton's laws and such. When understanding is based in empiricism, then it's correct, at least in the empirical context it was developed, even as new theoretical ideas may challenge and refine understanding at the frontiers.
Posted by: MPS at Oct 30, 2009 8:34:45 AM
Excellent illustrations of what I'd call "expertise bias". E.g., assumptions that 1) current trends will continue deterministically into the future, 2) politics is an effect and never a cause, demographics is a cause and never an effect 3) fish know more about water than anyone else. Glug.
Posted by: MattF at Oct 30, 2009 8:41:10 AM
I'm trying to figure out what you mean to be implying about the status of women in economics. You seem to be suggesting that they are weak theoreticians.
Posted by: Ryan at Oct 30, 2009 9:11:43 AM
Empirical work has a shorter half-life than does theory, at least on average. Yet most people today, including at top schools, do empirical work.
Ah yes, such a shame that nasty facts keep messing with our beautiful theories. Tyler seems to really regret that economics keeps trying to become a science.
Posted by: capitalistimperialistpig at Oct 30, 2009 9:13:55 AM
I like the comments, but I am not sure I agree about the half life of empirical work. There are two trends pushing for an increasing importance of empirical work: one is data availability, the other is increased processing capacity. Data availability tends to shorten the life-cycle since it means it is easy to go from one data set to the next. However, this is not true about processing capacity, which may give an impulse on empirical work based on ready made data, but also on surveys and collected data. If anything this pushes towards tighter and tighter integration of theory and data. This is probably more time consuming than doing just pencil and paper theory or just reduced form regressions.
One interesting question is what drives the trend towards large randomized experiments (which tend to be quite time consuming). Is it wider availability of resources? It is also interesting to think where this will lead us. Perhaps a situation like experimental physics, where certain institutions concentrating the huge amount of resources needed to undertake the experiments? Wouldn't that be a boon for the likes of MIT and Harvard?
Last point: Mathematicians bloom when they are young, but historians bloom when they are old. Relying more heavily on data makes economists less like mathematicians and more like historians. Perhaps this is something worth thinking about.
Posted by: Felipe at Oct 30, 2009 9:21:47 AM
"Can you back those statements up with empirical data, please?"
He can't, he is fully fluent in English :-)
Posted by: Jose at Oct 30, 2009 9:23:15 AM
For wealthy schools, I think number two will be solved by an increase in buyouts of professors to promote more turnover.
Posted by: Highgamma at Oct 30, 2009 9:30:36 AM
Empirical work has a shorter half-life than does theory, at least on average. Yet most people today, including at top schools, do empirical work. There will be fewer giants and more middling-size figures of temporary import. If you tenure a top empirical economist, what does your department look like when he or she is 60? What percentage of these people are skilled enough, or care enough, to continue reinventing themselves? Maybe some top departments won't look so top in twenty years' time.
College football teams turn over all of their players in a few years yet some programs remain powerhouses for many years or even decades. The better programs are more effective at recruiting top high school prospects, which enable them to remain strong year after year. It may turn out the same way with university economics programs - individual economists may come and go more frequently due to the half-life issue you mention, but the the top programs will have an advantage at recruiting new up-and-comers and will stay on top.
Posted by: Peter at Oct 30, 2009 9:35:22 AM
"Empirical work has a shorter half-life than does theory, at least on average"
And yet there is so much worthless theory especially among the applied mathematicians. The very best theory has a longer half-life. But there is so little good theory. On the other hand, there is a fair amount of middling empirical work.
Furthermore, if theory today is just applied mathematics and people do their best math when young, I think going with empirical economists might produce the better "old" departments.
Posted by: Mario Rizzo at Oct 30, 2009 9:40:22 AM
I think it is a false dichotomy to claim that theory and empiricism are polar, and, in fact, I would argue that the best economists are theorists who support their theory with facts, and are just as comfortable searching facts to come forward with new theory. I think behaviouralist fall within this category.
Posted by: Bill at Oct 30, 2009 9:59:51 AM
He isn't saying women are weak theorists, but when was the last time you saw a woman doing theory?
Posted by: Will at Oct 30, 2009 10:01:44 AM
Ummm, in science theories are kind of a big deal. In fact, they are kind of the beginning as well as the end objective.
I would think that theory is particularly important in economics because you cannot run too many controlled experiments.
Maybe I'm mis-characterizing it, but a debate between choosing theory or empirics is crazy talk. The point of a theory, or hypthesis, is to instruct the experiment, and the experiment is test the theory.
Posted by: Andrew at Oct 30, 2009 10:06:35 AM
"I'm trying to figure out what you mean to be implying about the status of women in economics. You seem to be suggesting that they are weak theoreticians."
I took it to mean that since many of the professorship jobs in Econ are currently held by males, a high turnover (due to empericism becoming irrelevant more quickly over time) presents more opportunities for those positions to be held by women. Of course, this ignores tenure and unionization of the field. I don't know what else Mr. Cowen would be implying, as maths are still dominated by males; so, Economics moving ever more towards a strictly math model based social science seems to favor male professorship.
Posted by: Ryan Vann at Oct 30, 2009 10:13:26 AM
Six years ago, I graduated from a top ivy undergrad program in economics.
Throughout my studies, I was continuously discouraged from pursuing a PhD program by most advisors and professors because "American schools don't prepare econ students with enough mathematical skills to succeed in an economics graduate program." I was told many times that if I truly wanted to get a PhD in economics, I had to major in math, physics, or some sort of heavily quantitative engineering field.
The corresponding undergraduate majors of our PhD students confirmed this (I did a little digging). Our top econ grad students were physics and chemical/aerospace engineering undergraduates.
Since I was not interested in changing my field of study, I pursued a CFA/CPA instead. I did not have an interest in dedicating four years of my life to engineering or physics; the passion simply wasn't going to be there if I knew I was only doing it to change my career focus 4 years later.
In my mind, if undergraduate econ wasn't sufficient preparation for graduate econ, then there was a failure of preparation in American undergraduate curriculums or too heavy a reliance on math/quant in the graduate programs. I'm happy with my choice now, but it's certainly something I look back on and wonder.
Posted by: James at Oct 30, 2009 11:00:00 AM
I've come to the realization that Tyler Cowen has immense public appeal and influence on young economists. While I've enjoyed Tyler's musings on this blog over years, I think he is increasingly posting comments to spark reader interest (either through contrarian tactics or by appealing to the masses through populist viewpoints). He would rather be popular and read, than right on particular issues. Anecdotally, I find him making several off-the-cuff remarks without any supportive evidence. I worry about this precisely because of his widespread influence. Of course, a blog is not peer-reviewed work but shouldn't scholarly discourse be about advancing our knowledge base, not making headlines. Bottom line: I'm disappointed by the trajectory of Tyler's recent commentary but fortunately Alex Tabarrok continues to post insightful and at times non-intuitive analyses which he seems to always provide empirical support even if not robust.
Posted by: Econometron at Oct 30, 2009 11:03:56 AM
It's Idiot Savants all the way down ..
Fake science by non-Americans who don't understand the market process -- what's not to love?
I'm so glad my tax dollars are paying for all this
Posted by: Greg Ransom at Oct 30, 2009 11:09:18 AM
How about a government bail-out for American students studying economics?
All joking aside, I tell my students that they will be competing globally to get a slot in a Ph.D program in economics. A graduate students coordinator for a major Ph.D. program told me that he could fill his incoming Ph.D. class with foreign students with perfect GRE's. Many graduate programs have hidden quota for American students. I do not have any problem with this type of industrial policy.
Posted by: Asif Dowla at Oct 30, 2009 11:20:04 AM
Well damn, as a ChemE maybe I am a better economist. It's all the same crap, but not in the way people think. Most of these different departments are just to justify tenured positions. I imagine, just like in engineering, you don't really need all that math, it's just a way to prove you are more capable than your competition. But, if they go ahead and assume it based on your skin color, that makes it even easier on them.
It's kinda funny, mathematical modeling was the only thing my advisor ever said he didn't think I should try to do while I made the only A in our in-department math intensive course.
Not that I feel much gratitude for my forthcoming degree, but the average joe sixpack thinks it's a privilege. And not that I don't believe in free trade, when it's free, but if the the average joe knew the extent to which we are giving away our technical education gifts, such as they are, to our competitors, I believe there would be a shitstorm.
You thought the Bush years were bad for funding. That was just right-wing zeitgeist against eggheads. Imagine if they knew the facts.
Posted by: Andrew at Oct 30, 2009 11:36:13 AM
So, I have a question for all the math genius profs. When was the exact point where it was decided that training was no longer part of the job description?
It continually amazes me how little academia actually tries to accomplish the things people think it exists for.
Posted by: Andrew at Oct 30, 2009 11:40:47 AM
