In my latest column for Bloomberg, I delve into the news surrounding David Deming’s latest piece in The Atlantic. Here is one episode:
…economics is a mature science, and surprising results often follow the laws of supply and demand. Innovation is often subtle – it can also be described, somewhat, as disruptive – in terms of the relative size of the results. So it is difficult for new ideas not to come out of nowhere, and that leads to a concentration of places, concentrated in schools with high reputations…
Can economists come up with novel solutions or ideas? Probably not. When there is a recession, or let’s say hyperinflation, there is a standard tool kit that includes monetary policy, monetary policy, deregulation and other policy changes. Economists can and do argue about the appropriate mix of those policies in a given situation. But there is no “new drug” waiting to be discovered.
Also:
As for microeconomics, when there is a lot of traffic on the highway, congestion pricing usually works. If there is not enough housing, we should try to cancel construction or end rent control. No smart outsider is going to come along and say, “The way to get more houses is for everyone to drink two shots of vodka,” or some other novel or wild idea.
The point is not that economists have all the answers. That we have a very comprehensive list of possible remedies.
And for the prices:
The good thing is that economists have achieved a lot. The bad news is that most of the remaining tasks will be boring and trivial. So one lesson is just to appreciate the dullness of the economy, because an exciting economy tends to mislead the economy.
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