Tuesday 16 January 2018

Solow on interdisciplinarity

Everyone thinks economics and other subjects should be interdisciplinary.  Just to show there is nothing new under the sun here is the brilliant economist Robert Solow on the matter, from 1972,  Science and Ideology in Economics. (update: full reference is: "Science and Ideology in Economics." The Public Interest no. 21 (Fall. 1970):. 94-107)


"When you leave your car with a mechanic, it doesn't bother you that he regards it as combustion engine on wheels....you don't feel it necessary to remind him it is also a status symbol.  Why then is it wrong for economists to regard the economy as a mechanism for allocating resources and determining income, despite the fact that it also plays a role in the determination of status, power and privilege?  why should economics be interdisciplinary?

the answer is, presumably, that because otherwise it will make mistakes.  The trouble is that the injunction is presented as...self-evident not as a conclusion from failure of certain narrow undertakings."

Solow continues:

"When they want economics to be broader and more interdisciplinary they seem to mean that they want it to give up on standards of rigor, precision and reliance on systematic observation interpreted by theory"

The productivity puzzle is a case in point.  By all means let's be interdisciplinary, but concentrate on the data and facts so we don't end up trying to solve the puzzle via casual observation.  Indeed this is one of Solow's most famous quotes "..every discussion by Economists of the relatively slow growth of the UK economy seems to end up in a blaze of amateur sociology".



Tuesday 2 January 2018

Early stage intervention

In David Willett's brilliant book he contests the widely-held view that education investment benefits are highest at an early age. He mentions the benefits depend a lot on, for example, a murder committed by an out-of-scheme male participant of a young person, this cost being substantial relative to an older person (since a young person has more income years to lose).

Here's Heckman's figure 1 of this paper "The Life Cycle Benefits of an Influential Early Childhood Program", https://hceconomics.uchicago.edu/research/working-paper/life-cycle-benefits-influential-early-childhood-program.  It shows that female returns are insignificant and much lower then male returns, much of which seem to be based on crime effects. Later he says
(p.63)
"ABC/CARE has treatment effects on crime for females for a number of
categories (see Appendix G). However, males are much more likely to commit
crimes that are more costly to the victims, to the criminal justice system,
and to society (Cohen and Bowles, 2010; Barak et al., 2015). ABC/CARE
also has treatment effects on crime for females for a number of categories (see
Appendix G). However, males commit crimes that are much more expensive
to society. These two categories are examples of why the magnitudes of the
gains are much higher for males than they are for females."
 I am no expert on this, but these differences seem interesting.