Economics without mathematics
Justin Fox sums up the overwhelming majority of economics papers in one sentence:
The basic form of an academic economics paper is a couple of comprehensible paragraphs at the beginning and a couple of comprehensible paragraphs at the end, with a bunch of really-hard-to-follow math or statistical analysis in the middle.
What he doesn’t (need to) mention is the way that journalists, myself included, read economics papers: we generally have no ability or inclination to try to understand the details of the formulae and regression analyses, so we confine ourselves to reading the stuff in English, and work on the general assumption that the mathematics is reasonably solid.
The problem of course is that we really have no basis for making that general assumption: we make it not because we think it’s particularly justified or justifiable, but because we don’t have any choice. What’s more, because we’re always interested in what’s new, and because we have easy access to the internet and little access to expensive journals, we gravitate to preprints at sites like SSRN, rather than papers which have gone through peer review.
I worry about this. The blogosphere is full of interesting debates between people who understand and respond to what everybody else is saying. But the minute that economic papers get cited, the degree of understanding plunges, and most bloggers and journalists are cowed by all those equations into simply assuming that it all stands up somehow.
There’s no easy way around this problem, but at the very least it should probably be much more out there in the open than it is. No one likes admitting ignorance, but the blogosphere would be a better place, I think, if we all did so more regularly, especially when it comes to the nuts and bolts of economic analysis.
On the other hand, maybe the general assumption is justified. Any economists care to weigh in on the frequency with which important problems in an economics paper are buried in the math?
Update: An Econ grad student writes to Andrew Sullivan:
[U]nderstanding the math lets you realize how narrow the analysis is and how stylized the world depicted by the model has to be for its conclusions to follow. As descriptions of the world, they’re metaphors; but without the math it’s hard to show someone where the metaphor holds and where it’s just an analogy not to be taken literally.
Update 2: Robert Waldmann writes:
The sloppy translation of “Pareto efficient” to “efficient” has caused huge damage…
However, things are much much worse than you imagine. It is not rare for the plain English parts of articles published in top journals to contradict the statistical analysis presented in the body of the paper. I absolutely assure you that it is not rare for the abstract introduction and conclusion to state that a hypothesis has not been rejected when the empirical results include rejection of that hypothesis.
Update 3: Mike Mandel says that “the real joker in the deck is not the mathematics, but the data. Or more precisely, the lack of good economic and financial data in many areas.” Although it’s unclear whether this results in incorrect papers, or just in the absence of good and important ones.