17 February 2012

A Brief Call for Change in The Economics Profession

As the stock market continues to boom, driven by strong macro economic indicators of the possible end of the Great Recession, it is only a matter of time before the policies of my neoclassical colleagues result in another downturn in the business cycle.  If the Debt situation in the EU doesn't cause the collapse fist of course.  I would love if my profession would accept even these small changes:

 The global economic systems needs new economic thinking because of unnecessary slowing of technological growth during recessions, and the social harm suffered when recession occurs.
  My decision to study economics is from a personal (technological) humanism.  The ability of people to develop their material lives has brought vast changes in living standards and productivity in my life time.  The greatest constraint on advancement is slowing of economies by market failures and productivity losses periodically experienced.

The processes that limit human advancement also can cause unnecessary suffering.  There is strong correlation between unemployment levels and health outcomes, family stability, and substance abuse.  New economic thinking could lead to much less suffering in the developed, and developing world.

The new economic thinking necessary needs to come in two forms:  Movement away from the neoclassical model of the individual (and firm).  Largely because a less ahistorical approach to the economy could lead to a much broader policy implication space.  Secondly, an increase in pluralism of methodology to open up economic outcomes beyond the limits of statistical analysis.  An expansion of accepted method could result in an expansion of solutions to some of the cyclical problems economies currently face.

I am not usually a champion of reform over revolution, but even small steps are better than none.

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