I’ve just become aware that over the last several months the Initiative on Global Markets at the University of Chicago has engaged in what might be deemed an experiment in determining what, if any, consensus there is among economists. They’ve assembled a panel of economists who are geographically, politically, and demographically diverse and every so often they poll them on an economic issue—monetary policy, trade policy, and so on. The results are tabulated and graphed and you can see what the responses of individual panel members were.
So, for example, in response to the proposition “There are no consequential distortions created by the tax preference that favors obtaining health insurance through employers” 95% of the panel members disagreed or strongly disagreed.
Particularly interesting to me is that on most issues there’s substantial agreement, including across political lines.
Worth a glance.
Interesting bit by Richard Koo on Fed officials and the balance sheet recession.
http://pragcap.com/are-fed-officials-aware-of-the-balance-sheet-recession
Correct me if I’m wrong, but I don’t see a single non-Ivy League, non-mainstream economist here. I see a cross section of neo-liberals and New Keynesians, hardly what can be described as diverse. I’m willing to bet if you polled them on vertical and horizontal transactions or Capital Structure Theory not one of them would have any idea what you’re talking about.
Ben Wolf: Correct me if I’m wrong, but I don’t see a single non-Ivy League, non-mainstream economist here.
An appeal to authority is valid when it represents the consensus in a field. Pointing to those outside the mainstream are, by definition, not part of the consensus opinion. However, you do want a diversity of opinion to determine whether such a consensus exists.
“Statistics teaches that a sample of (say) 40 opinions will be adequate to reflect a broader population if the sample is representative of that population.
“To that end, our panel was chosen to include distinguished experts with a keen interest in public policy from the major areas of economics, to be geographically diverse, and to include Democrats, Republicans and Independents as well as older and younger scholars. The panel members are all senior faculty at the most elite research universities in the United States. The panel includes Nobel Laureates, John Bates Clark Medalists, fellows of the Econometric society, past Presidents of both the American Economics Association and American Finance Association, past Democratic and Republican members of the President’s Council of Economics, and past and current editors of the leading journals in the profession. This selection process has the advantage of not only providing a set of panelists whose names will be familiar to other economists and the media, but also delivers a group with impeccable qualifications to speak on public policy matters.”
http://www.igmchicago.org/igm-economic-experts-panel/participants
This one is interesting. The consensus is that increasing the marginal tax rate on the top 1% will increase revenues, but will not close the revenue gap. This is noncontroversial within economics, but is highly controversial within politics, showing once again that “facts have a liberal bias.”
http://www.igmchicago.org/igm-economic-experts-panel/poll-results?SurveyID=SV_eM6AbvcBTI8MuvG
“An appeal to authority is valid when it represents the consensus in a field.”
An appeal to authority is not valid when a field is dominated by political ideology, which is all the mainstream is. It relies on mythology rather than observation and its intransigence is exactly why we’re in this mess.
The money multiplier: myth
Deposits create loans: myth
Government spending pushes up interest rates: myth
Fed actions create inflation: myth
All these (among many others) are utterly contradicted by observation, yet virtually each and every economist listed will insist they properly describe the monetary system. Why should anyone listen to them now?
Ben Wolf: An appeal to authority is not valid when a field is dominated by political ideology, which is all the mainstream is.
An appeal to authority is not useful when it’s not a valid field of study, but certainly economics is a valid field of study, and economists today know far more about markets and other economic phenomena than they did in previous generations.
As for bias, all scholars are biased—it’s part of the human condition. In this case, they chose scholars from a wide range of viewpoints. On many issues they disagreed, but on others, there was no significant disagreement. That doesn’t make them right, but it does constitute a valid appeal to authority.
Ben Wolf: The money multiplier: myth
Multipliers can range depending on circumstance. Keynesian countercyclical policy can work as long as the multiplier is greater than zero, though most economists suggest that under certain circumstances, the multiplier can be greater than one.
Ben Wolf: Deposits create loans: myth
Most economists would agree that it also requires demand.
Ben Wolf: Government spending pushes up interest rates: myth
Not necessarily. Most economists agree that there can be pressure on interest rates when the demand exceeds supply. If there is little private demand, then, all else being equal, government can borrow at low rates.
Ben Wolf: Fed actions create inflation: myth
Generally an increase in the money supply will cause price inflation (ignoring exogenous factors). The Fed can increase the money supply by loosening reserve requirements, by buying previously issued securities, or by lowering the federal funds rates.
Ben Wolf: All these (among many others) are utterly contradicted by observation, yet virtually each and every economist listed will insist they properly describe the monetary system.
That’s what you say, but most economists would disagree.
While I agree with Ben that the panel does seem somewhat cloistered to a few select universities, I reviewed their comments and the concensus opinions and accompanying commentary pretty well cover mainstream thought. One can see where disagreements were strongest, and on what subjects. Lazear makes one very valid point on the Tax(a) question that should be carved in stone and set on the Hill:
Revenue would rise, but the important question is what happens to growth, not revenue. The goal is not to maximize the size of government.
Well, to some it is, but the point to remember is that growing revenues to the government at the cost of economic growth is not exactly an optimal approach for anyone other than the bureaucrats and pols.