What Has Happened to Economics?

Some Thoughts on Economics and Policymakers

Originally published in The Legacy of Bruce Yandle

The Festschrift highlights the importance of institutions, economic incentives, regulation, and the interplay of economic agents in the nation’s political economy. These concepts characterize my work and interests, so here I consider these same notions in the context of economics itself. What about economics, broadly considered? How has the subject matter changed over my career? How might we assess the process that brings new economic learning to bear on public policy? Can we find some Bootleggers/Baptists influence in the process?

In this paper, to illustrate how economics has changed, I first offer some thoughts on the content of economics I encountered as an undergraduate college student. The struggle over how economics becomes applied to public policy follows this discussion. I then share some thoughts on the production of economic knowledge and how that has been influenced by the rise of highpowered computing. This discussion is followed by a section that examines the tournament of ideas that can cause older conventional wisdom to be dislodged and perhaps replaced by newer, more robust theories. Throughout the discussion that follows, I suggest how Bootleggers/Baptists activity affects which theories—new or old—will be used politically to justify action.

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