Is economics a science? (liquidity trap edition)

At Marginal Revolution today, Tyler Cowen asks this question, does some research on empirical analyses of the existence (or not) of liquidity traps, and comes up with a conclusion in which I concur: economics is not a science of the researcher cares about the outcomes of the analyses.

By the way, apologies for any funky formatting; this is the first time I’m posting from my phone!


2 thoughts on “Is economics a science? (liquidity trap edition)

  1. You spin Tyler’s phrasing a bit, and I’m not sure I completely agree with either of you.

    You: “Economics is not a science if the researcher cares about the outcomes of the analyses.”

    Tyler: “Economics is most like a science when people do not care about the outcome of the argument.”

    So the biologist who studies potential treatments for cancer shouldn’t care whether the treatments actually work? I’m sure that is not what you or Tyler mean, but that is what it sounds like you mean.

    Yes, a lot of bad analysis is done with the goal of proving that my team is better than your team. If I’m Keynesian then I want to cheer on liquidity trap stories, if I’m Chicago-school or Austrian or whatever then I want to take down liquidity trap stories. If I’m anti-big government, I want to prove that big government is bad. I become interested in regulatory economics because that is one place the ‘big government’ rubber hits the road and I want to study the area to find proof of what I believe and what I think you should believe too.

    There is a big confirmation bias problem among scientists, as among everyone else, but the fix is not to snip the link between a scientist’s values and the scientist’s work. Rather, promote honesty and integrity in research as a part of the scientists’ values, promote use of effective scientific methods to help overcome confirmation bias, and rely on the institutions of science to sort out the differences.

    A messy, evolutionary, dynamic open-ended process to be sure (but I’m sure you are down with that).

  2. Could it be that whether you can apply the label “science” to all of economics is a red herring? It may be that some questions of economics can be dealt with in a scientific manner, but does that make it a “science”? Many questions of economics seem to be out of the reach of the scientific method, which makes me want to withhold that appellation. But I don’t think there’s a bright line in any case, at least not one that matters. I’m just not sure this is an important question. If I had to agree that economics is a science, I’d have to say that it’s very difficult to get any science done within it.

    It’s my impression that there are religions in economics, as in politics. Facts don’t resolve the differences because of the complexity of the system. The facts support all sides, which means the facts don’t really support any side. Yet, there are schools of belief. We shouldn’t be surprised; it seems to be human nature to come up with religions to deal with unprovable and unfalsifiable propositions. The questions that can be dealt with scientifically are small and elemental, and can only marginally help understand the system as a whole. Not finding facts to deal with important things we can’t understand, we create religions. It’s the way the human components of the system seem to behave… 😉

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