Monday, September 21, 2009

Mathematical elegance and empirical relevance – part 2

The previous post raised two questions that need to be kept separate:

  1. “How could you convince a fellow die-hard-formalistic-member-of-the-economics-tribe that the profession has gone wrong because it fell in love with mathematical formalism?”
  2. Is it true? I.e., is it possible to empirically validate the hypothesis that economists believe stupid empirical claims on the basis of empirically irrelevant mathematical proof/beauty/elegance/norms/whatever?

These are two VERY different questions. The first one bites itself in the tail: If someone relies on irrelevant and false criteria when evaluating claims, then you would have to come up with an argument that succeeds given these false and irrelevant criteria in order to convince him. This sounds logically humorous, like convincing a Christian that God doesn’t exist by making him believe God told him so. Or, in our case, making a nice, formal model that fits the intuition of economists, coheres with all established formal protocol, elegantly extends the standard framework of microeconomic choice, and that results in some absurd and silly proof that rational agents can be rationally misguided by acting and judging in the way the economists see themselves as acting and judging.

Put differently, this is a question of how to manipulate a system (in this case the one determining the beliefs of economists), how to change someone’s beliefs. It is a question of pscyhology.

The second question is – I believe – more important. There is a clear distinction (at least conceptually) between things that influence choice/thought/behavior and things that a person him-/herself believes to influence his/her choice/thought/behavior. What we would like to know is what kind of evidence/arguments/proofs economists emphasize when judging empricial claims from other economists. I am writing as I’m thinking here – always a somewhat risky proposition – but some first thoughts:

  • Ask a sample of economists for the 5 strongest arguments that support some academically based empirical conclusion they support (“What are the 5 strongest reasons you know that support your view that technological shocks drive business cycle behavior?”)
  • Find some way of categorizing articles and their mix/share of theory/empirics and sum over the references used to support policy claims by economists
  • Ask what kinds of implications economists draw from some branch of theory – and then ask what kinds of evidence they believe to be relevant for judging these (an approach Hans Olav Melberg and I have attempted in an article we are currently finishing up)

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