Sunday, November 23, 2008

Has economics as taught in Canadian Universities become irrelevant?

In the Calgary Herald on Saturday, Peter McMartin wrote a story that challenges the relevance of economists given that so few anticipated the recent economic crisis, and perhaps even worse, seem to have no clue as to how this mess might be fixed. The usual critics of neo-classical economics are represented by JK Galbraith's son James, an economics professor himself. About the abysmal forecasting ability of economists of late, Galbraith states:

"It's an enormous blot on the reputation of the profession. There are thousands of economists. Most of them teach. And most of them teach a theoretical framework that has been shown to be fundamentally useless."

But it's not just Galbraith. Agreeing with Galbraith, Rick Harris of SFU adds:

"What is it we teach? What is taught is the textbook properties of what I would say is a normal functioning economy. And most of that stuff has nothing to do with what is going on now."

Paul Beaudry of UBC is not as down on economists as Galbraith and Harris over the recent events since Beaudry discounts the importance of forecasting as one of our profession's core purposes. Instead, Beaudry sees economists in playing a bigger role in analysing events after the fact and to use that knowledge to prevent crises from re-occuring:

“Really, the science is managing (the economy) after all this stuff has come out. Have we learned from the previous crises? And if we’ve learned from previous crises, what policies should we follow to prevent them from happening again?”

From this story, it appears that economists are either irrelevant for understanding and managing the economy, or just useless over the short run.

Read the full story, Peter McMartin, "Economists go soul searching", Calgary Herald, Nov. 22, 2008, page C2.

Most of the story is available at:

Monday, November 10, 2008

Women in the Economics Profession

It's no secret that women are underrepresented in the economics profession. Part of this, as has been pointed out by many, is a selection story: women aren't attracted to the economics profession the way men are. However, Christian Zimmerman, who runs the RepEc service, posted the following:

Women have always been underrepresented in Economics. For example, regarding US faculty, the Committee on the Status of Women in the Economics Profession (CSWEP), a subcommittee of the American Economic Association, determines in its latest annual report that women represent 28% of assistant professors, 21% of associate professors and 8% of full professors in PhD granting Economics department. As a whole, they represent 19% of all Economics faculty.

The point of this post is not to complain about the low proportion of women in the profession, or about their dwindling share up the ladder, but about the lack of involvement on women in RePEc. Currently, their share is at 14.5%. It is clearly below the 19% mentioned, although it is slowly increasing (it was 13.6% a year ago and 12.7% two years ago). Why this underrepresentation?

Wednesday, November 5, 2008

The importance of health

While the headlines have been full of the financial crisis, and the monster $700bn bank bailout, health care continues to be a key story in the US, which spends approximately 16% of GDP annually on health care but achieves poor average outcomes. If the US could reduce its health care spending to the levels of other OECD countries, it would save approximately $700bn per year, enough to pay for a bank bailout every year, without compromising average health outcomes... There are some very large potential gains the Democrats can harvest.