Economics is stale and worthless

This is the abstract for a paper on “The Focus of Academic Economics: Before and After the Crisis”.* As is quite obvious from watching Treasuries and central banks around the world, no one learned a thing. In fact, no one even tried to investigate. Economics as now taught is stale and worthless.

Has the global financial crisis of 2007ff had a visible impact on the economics profession? To answer this question we employ a bibliometric approach and compare the content and orientation of economic literature before and after the crisis with reference to two different samples: A large-scale sample consisting of more than 440,000 articles published between 1956 and 2016 and a smaller sample of 400 top-cited papers before and after the crisis. Our results suggest that unlike the Great Depression of the 1930s the current financial crisis did not lead to any major theoretical or methodological changes in contemporary economics, although the topic of financial instability received increased attention after the crisis.

Moreover, given the dating of the papers examined, no one has learned a thing from the absence of a recovery anywhere in the world in the decade following the GFC. Of course, what they learned after the Great Depression was Keynesian economics, which was a universally-understood fallacy among the entire mainstream of economic theory before 1936, accepted only by Marxists and economic cranks, but I repeat myself.

I might mention that I have just been sent the book description being used by my publisher for my next book which is on classical economics and how to understand it.

Economic theory reached its highest level of analytical power and depth of understanding in the middle of the nineteenth century among John Stuart Mill and his contemporaries. This book explains what took place in the ensuing Marginal Revolution and Keynesian Revolution that left economists less able to understand how economies operate. It explores the false mythology that has obscured the arguments of classical economists, providing a pathway into the theory they developed.

On this, let me again quote Senator Cameron from when I appeared before the Economic References Committee in 2009.

Why have the IMF, the OECD, the ILO, the treasuries of every advanced economy, the Treasury in Australia, the business economists around the world, why have they got it so wrong and yet you in your ivory tower at RMIT have got it so right?

Best question ever. My book will provide the answer.

* Ernest Aigner (Vienna University of Economics and Business); Matthias
Aistleitner (Johannes Kepler University); Florentin Glotzl (Vienna
University of Economics and Business); Jakob Kapeller (Johannes Kepler
University). “The Focus of Academic Economics: Before and After the Crisis.”

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8 Responses to Economics is stale and worthless

  1. Bruce of Newcastle

    Why have the IMF, the OECD, the ILO, the treasuries of every advanced economy, the Treasury in Australia, the business economists around the world, why have they got it so wrong and yet you in your ivory tower at RMIT have got it so right?

    This.

    In Stuttering, Stumbling Address Christine Lagarde Vows To Link QE To Climate Change (2 Dec)

    There you go. She has just stepped down as head of the IMF and has been head of the ECB for a month.

    If she can’t get climate right how can anyone expect she can get economics right? Any wonder why the IMF has gotten so useless this decade?

    There is no hope of practical and useful economics when so much of the field is captive to the Left, their fads and their mysticism. Until the Left rediscovers empiricism every field they infect will become worthless.

  2. Leigh Lowe

    Economics is Stale and Worthless.
    This is not breaking news.

  3. Mother Lode

    Why have the IMF, the OECD, the ILO, the treasuries of every advanced economy, the Treasury in Australia, the business economists around the world, why have they got it so wrong and yet you in your ivory tower at RMIT have got it so right?

    Ever heard of ‘peer review’ as she be practiced by warmies? A fortress designed to protect those on the inside from being exposed and to keep outsiders away from where they can be heard.

    Like that.

  4. Ƶĩppʯ (ȊꞪꞨV)

    modern economists couldn’t predict their way out of a wet paper bag

  5. Mother Lode

    modern economists couldn’t predict their way out of a wet paper bag

    Reminds me of an old joke.

    A chemist, a physicist, and an economist are stranded on an island. They have no food except one tin of soup…but no can opener.

    The chemist says “If we grind up some of these stones and mix them with sea water it will form an acid and we can burn a hole in the tin.

    The physicist says “If deform the metal at the top of the tin the right way, and put it in a fire, the pressure will cause the top to peel open.

    The economist says “Why don’t we just assume there is a can opener?”

  6. Fisky

    It’s an absolute disaster. We have collapsing productivity, disinflation, record low interest rates, and none of our leading economists have a clue what to do about it. It is time to abandon economics as a discipline. It doesn’t work anymore.

  7. Mark A

    Economics as now taught is stale and worthless.

    As LL said.
    When was it anything else?

  8. Fisky

    Reducing immigration by half is the only tool we have to reverse the productivity decline. It will require a major reset in our economic model, but we have no choice. The property-population-ponzi has destroyed the economy and the prospects of an entire generation.

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