Five Ways to Improve Economics

Lars Syll presents five things that should be done to "re-establish economics as a realist and relevant social science." They're solid, but he forgets you're supposed to save the best for last.

(1) Stop pretending that we have exact and rigorous answers on everything. Because we don’t. We build models and theories and tell people that we can calculate and foresee the future. But we do this based on mathematical and statistical assumptions that often have little or nothing to do with reality. By pretending that there is no really important difference between model and reality we lull people into thinking that we have things under control. We haven’t! This false feeling of security was one of the factors that contributed to the financial crisis of 2008.

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Justin Green

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