Putting Economic Models in Their Place

Some knowledge can be ‘embodied’ in books, blueprints, machines, and other kinds of physical capital, and we know how to introduce capital into a growth model


When policymakers turn to economists for guidance, they expect the advice they receive to be grounded in science, not academic factionalism or political presuppositions. After all, the policies they will be putting in place will have real implications for real people. Unfortunately, however, sound science is not always the driving force behind economic analysis and policy recommendations.

In a recent critique of what he calls the “mathiness” of modern economics, Paul M. Romer of New York Univ...


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