American Economics

I just came across – via the Economist – an interesting study. Apparently economists are obsessed with America and write precious little about the rest of the world. The study was published in the Journal of Development Economics back in November last year. It sits behind a confounded paywall, but you might be able to get hold of it at your library.

I am exaggerating a little, but too much. Economists focus way too much on the American economy and way too little on the rest of the world, especially its smaller and less developed economies.

Now I look at this with some skepticism.

It occurs to me that the American economy has not, too noticeably, benefitted from all this attention. To an academic discipline more concerned with its real world impact this might spur some self-evaluation. Not, I doubt, in economics. With a veritable flood of studies flowing from our universities, government agencies, and other sources, all presumably based on the latest and best thinking, one would, I argue, expect the combined effect to be something other than random. It ought, surely, to have been positive. That is if economics amounts to anything.

Imagine, for instance, how horrendous the Great Recession might have been had all those papers not been published. We might have suffered a total meltdown in our banking system. We might have had a terrible bout of unemployment – some of it might even have persisted for years. Our government deficits might have brought our economy down. Inflation might, or might not, have soared – this one depends on which studies you read. It is a nightmare just thinking about the possible state we might have been in had it not been for all that work.

On reflection, it’s a good job economists focus on us so much. Armed with their theories, their research, and their commitment to mucking about in raw data, we dodged the big one.

Didn’t we?