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1/This thread argues that prizes like the Econ Nobel should be given based on the importance of the questions people *ask*, not on how sure we are that they got good *answers*.
I pretty strongly disagree. https://twitter.com/BrankoMilan/status/1315841880874254336
I pretty strongly disagree. https://twitter.com/BrankoMilan/status/1315841880874254336
2/We used to award Nobel Prizes to people for thinking long and hard about big issues. For example, Friedrich Hayek, who thought a lot about the causes of economic fluctuations and the political effects of the welfare state, won the prize in 1974. https://www.nobelprize.org/prizes/economic-sciences/1974/press-release/
3/No one can accuse Hayek of avoiding the big questions.
But did he get any of those big questions right?
One of Hayek's core theses was that countercyclical policy would lead to totalitarianism. This turned out to be completely wrong.
But did he get any of those big questions right?
One of Hayek's core theses was that countercyclical policy would lead to totalitarianism. This turned out to be completely wrong.
4/Hayek also had lots of thoughts about what caused business cycles, but I think it would be fair to say that right or wrong, his thoughts have not helped us deal with business cycles any better.
But he thought about them! He asked the big questions, and he got a Nobel for it.
But he thought about them! He asked the big questions, and he got a Nobel for it.
5/So does this mean that the Nobel committee simply messed up in this case? Should they have awarded the 1974 prize to someone who thought about the same big questions that Hayek thought about, but who arrived at different answers?
6/Maybe so, but the fact is, while Hayek's ideas about "the road to serfdom" were already obviously wrong by 1974, it's not clear that his business cycle ideas will EVER be proven right or wrong. In fact, it's not clear they CAN be, since they're too vague to be testable.
7/If we award the prize to whoever we think has the most convincing-sounding thoughts about the business cycle, or growth, or inequality, etc., the Econ Nobel will become a political scrum. People will simply lobby for researchers whose conclusions they personally like.
8/The alternative is to try to make economics more like a science. To insist that we validate ideas with data, and replicate the validation, before we award those ideas with big prizes like the Econ Nobel.
9/Of course, in the past, the Econ Nobel committee generally hasn't done that. Often, it has awarded prizes to ideas that are gussied up in the language of mathematics, but are either untestable or already disproven. https://www.nobelprize.org/prizes/economic-sciences/2004/summary/
10/The Econ Nobel has mainly functioned as a *methods* prize. It has been given mainly to researchers who develop new methods that are then adopted by other economists.
Influence within the econ field, not empirical validity OR political importance, was the criterion.
Influence within the econ field, not empirical validity OR political importance, was the criterion.
11/But that may be changing.
This year's prize, like a number of others in recent years, was given to researchers who developed theories that had definite testable predictions and real-world engineering applications. https://www.bloomberg.com/opinion/articles/2020-10-12/economists-are-starting-to-think-like-engineers?sref=R8NfLgwS
This year's prize, like a number of others in recent years, was given to researchers who developed theories that had definite testable predictions and real-world engineering applications. https://www.bloomberg.com/opinion/articles/2020-10-12/economists-are-starting-to-think-like-engineers?sref=R8NfLgwS
12/So the Econ Nobel may be moving more in the direction of being a science prize. And econ itself is moving in the direction of being more empirical -- more like an actual science. https://www.bloomberg.com/opinion/articles/2018-08-02/how-economics-went-from-philosophy-to-science?sref=R8NfLgwS
13/Some people don't like this. They argue that social sciences will never be true sciences (wrong!). They say that it's arrogant for economics to believe that it can be scientific.
14/But I think this worldview is fairly ridiculous.
To think that inventing theories that let the FCC auction off wireless spectrum more efficiently is "arrogant", while penning grandiose theses about capitalism is "humble", is to reverse utterly the meanings of those words!!
To think that inventing theories that let the FCC auction off wireless spectrum more efficiently is "arrogant", while penning grandiose theses about capitalism is "humble", is to reverse utterly the meanings of those words!!
15/Making small-bore theories that really *work* -- not in the "it fits my political desires" sense, but in the "it reliably makes quantitative, testable predictions" sense -- is not arrogance.
It is humility.
It is humility.
16/Doing credible empirical studies, even if the implications of those studies are incremental, is not arrogance.
It is humility. https://www.bloomberg.com/opinion/articles/2019-10-14/economics-nobel-for-banerjee-duflo-kremer-shows-key-change
It is humility. https://www.bloomberg.com/opinion/articles/2019-10-14/economics-nobel-for-banerjee-duflo-kremer-shows-key-change
17/Humility is the essence of science.
The fact that you wrote about a Big Important Problem doesn't mean you actually solved it.
Take it from a guy who writes about Big Important Problems every day for a living.
The fact that you wrote about a Big Important Problem doesn't mean you actually solved it.
Take it from a guy who writes about Big Important Problems every day for a living.
18/Op-ed writers like myself don't deserve to win Nobel (or even pseudo-Nobel) prizes, even if our op-eds are book-length. Even if our op-eds are really politically popular.
19/If you think the economics field's move toward applicable theories and credible empirical studies is "arrogance", you need to consult a damn dictionary.
What it is, is science.
What it is, is science.
20/Science is painstakingly slow. Every miniscule grain of truth it reveals about the Universe is an incredibly hard-won battle. It is the labor of ages, not of hours.
But in the end, those grains add up to a mountain. When Big Ideas go out of fashion, science endures.
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But in the end, those grains add up to a mountain. When Big Ideas go out of fashion, science endures.
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