Look, I’ll give a fair hand to _some_ economists, too, as well as a back hand. I do think that the best economists understand the _limitations_ of their tools, and try to scale their conclusions to the real and near limits of what they can justifiably conclude. That makes for modesty of a kind little in evidence in the perspective of your pro-disciplinary comment. Economics, to me, perhaps works best at disconfirming hypotheses by relatively straightforward statistical and mathematical tests where the data is such that these get traction. Again, I think the best economists understand this and get the conceptual measure of their focus of study before they wade in with quantfication; they reason well, and only use the math to test and verify a conclusion. And math is used that way in other human disciplines, sociology or social history, for example. Yes, quantification can be a disaster there if one thinks that a number is in and of itself a better answer, but good work can be done _with_ math, but not with match alone.

And re: nonlinear economic models, I couldn’t be more interested in them than you are yourself. I have felt that the studies I have read, no more than a fraction of this literature even so, are more talk than result, even if they do try. If you have citations or particular bodies of work you think good in this sub-field, I suggest that you mention them for those interested; that would indeed be more of a contribution than thus demonstrated. And your views would have more credibility if you identified yourself. You might drop in on the guest post of 13 July and make some real input from your perspective on the literature.

Moreover, many of these discrepancies may soon be corrected and/or better understood. First, as the still emerging and successful research program of positive political economy becomes more prevalent in the academy we will also see dramatic shifts in the demographics of the political and economic professions. Second, the stronger emphasis of bridging the gap between empirical and formal models of politics and economics will begin to weed out poorly performing models as empirical model are nested in formal deductive theories and formal models are validated by derived empirical models with more advanced modeling techniques and larger data sets. Third, many of the problems with economic models have been the reliance on (becomingly) crude technical applications. Unfortunately, our tools seem to lag behind our instinctual understanding of politics, economics, and markets, and the world in general. Until recently nearly all advanced economic research has been conducted under the rational actor and linear perspectives when we have known for years that actors are not rational, nor is anything linear. Advances in approaches that emphasize nonlinearity are rapidly materializing in a very serious way. It would be wise for one to keep their eyes pitched to computational methods: particularly agent based computational economics and it appendages.

By the mid 1950s, Samuelson could write: by means of appropriately reinforcing monetary and fiscal policies, our mixed-enterprise system can avoid the excesses of boom and slump and look forward to healthy progressive growth (Paul Samuelson, Economics, 1958) A year which also happened to be one of recession though I think he had written the same in 1955.

In 1969, when he should have noticed the already becoming evident transition, Harrod could write in his manual Money that fairly full employment should now be regarded as an institutional feature of the British economy. (Roy Harrod, Money, London 1969)

Even better, Stoleru’s 1970 assertion: It has often been said that a crisis such as the Great Depression could no longer take place today, given the progress made in techniques of state countercyclical intervention. These claims, presumptuous as they may seem, are not without foundation. (L. Stoleru, L’équilibre et la croissance économique, Paris 1970)

In contrast, a Belgian heterodox economist wrote in 1969:
[We] reached three conclusions: first, that the essential motor forces of this long-term expansion would progressively exhaust themselves, in this way setting off a more and more marked intensification of interimperialist competition; secondly, that the deliberate application of Keynesian antirecessionary techniques would step up the worldwide inflation and constant erosion of the buying power of currencies, finally producing a very grave crisis in the international monetary system; thirdly, that these two factors in conjunction would give rise to increasing limited recessions, inclining the course of economic development toward a general recession…[which] would certainly differ from the great depression of 1929-32 both in extent and duration. Nonetheless, it would strike all the developed countries and considerably exceed the recessions of the last twenty years. Two of these predictions have come true. The third promises to do so in the seventies. (E. Mandel, Intercontinental Press, 14 July 1969)

austrians seem to be the only ones who understand this, and likewise get things right more often than not.

but i agree; the quacks have out worn their usefulness. i’d lump them in the same category as central bankers, mutual fund managers, and stock analysts. they exist only to push marketing material for their constituents.

“Economics is always and everywhere a political phenomenon.”

The detonator for this bomb has been the economists at the CB’s across the world. The debt bubble and the destruction of savings are two sides of the same coin. Cannot have one without the other. A sure fire recipe for individual wealth destruction that somehow has been rationilized at the national (international) policy level.

Truly a winter of economic thought that continues.