Do economic crises reflect crises in economics?

Dan here…Worth reading the whole 12 pages.   (Hat tip New Deal democrat)

Do economic crises reflect crises in economics?

Keynote address, ‘Rethinking Economics’ conference, Stiftverband für die Deutsche Wissenschaft/Handelsblatt, Frankfurt am Main, 23 January 2012.

Diane Coyle, Enlightenment Economics and Institute of Political and Economic Governance, University of Manchester


The ‘series of unfortunate events’ in the global economy since 2008 make it natural to ask where the economists have been.1 If you have a leaky boiler, you expect the plumber to mend it; a dentist should cure your toothache; so why haven’t the economists been able to fix the economy?

When economists meet privately these days, we will most often whisper to each other, isn’t it all so interesting? These are fascinating times. Every day brings something new to think about. It isn’t only economists who want to understand what’s going on. There has been an increase in the number of students choosing economics at university, and there seems to be a strong appetite for popular books and lectures.

So I would like to present a paradox. Economics is both in crisis and experiencing an extraordinarily fruitful renaissance. There is already a new approach emerging from the pre-crisis framework, like a butterfly hatching out of its chrysalis. It’s much less tied to a particular theoretical approach, more pragmatic, more empirical. It is rooted in a lot of existing work that has been more or less hidden from public view but is what most economists actually do.