Tuesday, January 31, 2012

Wisdom Of Martin Wolf

Enlightening piece from Martin Wolf on the future of economics... too bad politicians and people wouldn't heed to this wisdom and probably prefer to stay stuck in the quagmire of 20th century economic ideologies.
  • Let a thousand flowers of thought bloom. There cannot be just one general model of the economy or just one approach to economics. Among the blooms discussed were behavioural economics, neuroeconomics, computer based modelling of processes over time. Participants recommended talking to political scientists and even sociologists. They also recommended looking at the causes of inequality, the economics of happiness, the role of institutions, the importance of culture, and the effects of power. Fortunately, economists are creative people. A great deal of imaginative stuff is going on.
  • Time matters in economic processes, which are, in general, not reversible and not characterised by any sort of equilibrium. More broadly still, economics suffers from physics envy. It seeks to be an exact science, which is impossible.
  • Even though economists get much wrong, they still have much to offer to non-economists who tend to assume that economic problems are far more simple than they actually are.

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