Friday, August 22, 2008

Do Economists Unfairly Ignore Our "Outlier" Peers?

Here is a silly piece on "Thought Control in Economics," thanks to Tyler Cowen at MR for the link. In teaching a economics principles course, we are not correspondents for Fox News, we are a science. We wouldn't expect medical schools to give a fair and balanced approach to the research from tobacco companies on why cigarettes don't cause cancer, but instead we would expect them to treat it like it doesn't exist.

Actually, I have always viewed the field of economics as being at the opposite end of this extreme. If it appears that there is too much conformity in the field, it is because what it good science gets incorporated into the mainstream within a few years.

Take for instance Austrian Economics, which from my understanding received a less than warmhearted welcome from the mainstream field for its more general principles. That did not stop the mainstream from adopting what is now arguably the most important concept in economics, marginal analysis.

Gary Becker was largely ignored for his work on the economics of crime and family initially, but ultimately it won him a Nobel Prize.

If memory serves me correctly (please correct me if you know I'm wrong), the AEA was originally a socialist organization, which is the historical reason they today maintains a progressive fee structure. I also think you would be much more likely to be able to publish something unlikely and outlandish than something everybody already accepts as true, especially in the highest journals like the AER.


Thomas said...

(Niederhoffer, 1997, p.20) quoted in "The Adaptive Markets Hypothesis: Market Efficiency from an Evolutionary Perspective", Lo, 2004:

This theory [EMH] and the attitude of its adherents found classic expression in one incident I personally observed that deserves memorialization. A team of four of the most respected graduate students in finance had joined forces with two professors, now considered venerable enough to have won or to have been considered for a Nobel prize, but at that time feisty as Hades and insecure as a kid on his first date. This elite group was studying the possible impact of volume on stock price movements, a subject I had researched. As I was coming down the steps from the library on the third floor of Haskell Hall, the main business building, I could see this Group of Six gathered together on a stairway landing, examining some computer output. Their voices wafted up to me, echoing off the stone walls of the building. One of the students was pointing to some output while querying the professors, "Well, what if we really do find something? We'll be up the creek. It won't be consistent with the random walk model." The younger professor replied, "Don't worry, we'll cross that bridge in the unlikely event we come to it."
I could hardly believe my ears-here were six scientists openly hoping to find no departures from ignorance. I couldn't hold my tongue, and blurted out, "I sure am glad you are all keeping an open mind about your research." I could hardly refrain from grinning as I walked past them. I heard muttered imprecations in response.

Justin M Ross said...

That interesting story from Niederhoffer would be an indictment of those particular researchers' ethics, not the profession's unwillingness to consider the outcomes.

Agree or no?

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