A former top official at the Bank of England has claimed most economists’ work is irrelevant, and said it allowed “charlatans and crack pots” to fill their place in the debate over issues like Brexit.
Danny Blanchflower tweeted that it was “hard to see the relevance of most of economics”, saying 95% of papers he saw were on subjects that few people cared about or which “failed to make the world better.”
Blanchflower then told Yahoo Finance UK the profession was too focused on publishing in major but not widely read journals, rather than seeking to answer critical questions.
The economist, a former member of the Monetary Policy Committee which sets UK interest rates, said economics’ reputation suffered as a result of its failure to predict the financial crisis, partly because it had been dominated by “third-rate mathematicians who knew nothing about the real world.”
Many economists had begun to use more empirical rather than theoretical work, he added, but were using narrow experimental methods which “precisely answer narrow questions that nobody cares about very much.”
He said: “My view is that economics has lost its way. I did some work looking at the top five journals and ten years later most papers are hardly cited, and especially so in theory.
“As a policy maker I look at the papers that are published weekly and say to myself, ‘Who is this aimed at, which policy maker in the world cares and how would this improve the human condition one jot?’ The vast majority fail these tests.”
“This leaves the major issues of the day, especially in macro-economics, open to charlatans and fools. A good example in the UK is some of the economists supporting Brexit, who are a bunch of charlatans and crackpots,” he said.
It is not the first time economists in favour of Brexit have come under fire, with the Economists for Brexit group accused of publishing a “doubly misleading” study last year.
Their report was the only economic model to show material benefits from a no-deal Brexit, but the modelling used was condemned by several leading economists.
But mainstream economists have also drawn increased criticism over the past decade since the financial crisis, though heavy attacks from former influential government figures like Blanchflower are less common.
In 2016, the Conservative MP Michael Gove, now environment minister, refused to name any economists who had endorsed Brexit, famously claiming that “people in this country have had enough of experts”.
US president Donald Trump also allegedly considered sacking Chair of the Federal Reserve Jerome Powell, who he appointed in February 2018, as the S&P 500 entered a bear market last week.
Source: Yahoo Finance UK