Can Economics Change Your Mind?

Another example comes from Amy Finkelstein, one of the top health economists in the country. When she set out to study what caused big differences in healthcare costs, she expected that her results would show that it was hard to change behaviors. Instead, her analysis showed that people changed behavior and used less healthcare when they moved from geographies where people on average spend a lot on healthcare to places with low spending. According to Finkelstein, this is just how empirical research works, telling an interviewer:

“This is what I love about empirical research: I go into it with an idea—a question and an idea about the answer. But if I knew the answer, it wouldn’t be fun to do it. And it certainly wouldn’t be important if all we ever did was confirm our hypotheses. I have to have some idea to start, of course, but I often find myself radically rethinking it because it turns out just not to be right.”

That is probably as it should be. In other cases, even high profile economists find that they cannot cling to a long-held viewpoint in the face of convincing evidence, and hit reverse very publicly. Narayana Kocherlakota spent three years at the head of the Minneapolis Fed criticizing monetary policy as risking out-of-control inflation and unlikely to help the economy. Then in 2012, he made an about face, telling the New York Times that "a wave of research gradually convinced him that he was wrong." As a result he became one of the most strident proponents of more monetary stimulus.

- More Here and Tyler Cowen's changed mind here