6 The areas of economic history and development seem to occupy a lower
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6. The areas of economic history and development seem to occupy a lower status in our profession than econometrics and economic theory. What did the readings say were the causes and cures for this "problem?"
Economic history and development do occupy a lower status in the economics profession than econometrics and economic theory. The study of economic history is difficult to look at because it is so broad. Development is difficult in every aspect because in each model a different type of development needs to be applied.
Pranab Bardhan is aggravated by the ignorance of the new generation of economists. In his article "Economics of Development and the Development of Economics" Bardhan states that many of the ideas that they are postulating with have already been formulated. They would know this if they were well read on the literature. Bardhan also states that this is another case of "old wine in new botttles."
Others began to attack old models and formulate new ones just to fit into the main stream. Bardhan then explains that many fundamentalist thoughts were being applied to third world countries. Many mainstream economists began to worry when the thoughts being applied did not work. He used an analogy such as that the use of LDC's is to economics is what the study of pathology is to medicine. We can formulate how an economy will function when it is designed. The only problem when economics applies bad or unnecessary models to LDC's, people suffer.
Pranab continues with pecuniary models and the argument many LDC's used, the infant-industry model. All these arguments were formulated in the 1950's, but have advanced little since then. Dasgupta and Ray in 1986 stated that the malnourishment of the currently unemployed, may lead to a rise in aggregate output in the economy. Leibenstein and Maumdar argued this in 1957 and 1959. Once again "old wine in new bottles" is seen.
Development is in economic theory, it is just missed by many. Stiglitz showed that there is not much difference in sharecropping and running a corporation. There are risks, information asymmetry and moral hazards. Economists need to view the broad range of economics. Pranab says that development economics and other fields of economics need to be two lane roads that share information.
Kenneth Boulding states in "What Went Wrong With Economics" that today economists are looking for finite answers through math. Boulding states that there is a problem with using mathmatics. The math that is used is not relevant to economics. We are using math from the 17th and 18th centuries. He states that minus minus equals a plus in mathmatics. In economics "not doing harm is very different from doing good." Economists need to understand this and get back to the basics of economics.
Boulding goes on to show that there is no exact science for economics. It is an overview of many sciences formulated into one. There are also false taxonimies that need to be viewed and quantification of variables as well. The literatures needs to be viewed as well as a mixture of the sciences. Economists also need to see that people have a variety of choices and sometimes it is not specific. Boulding used as an example household consumption. Is it considered household consumption if it is a durable good.
Bolding in the "Economics of Pride and Shame" shows that people still view economic history and development, but do not realize it. For example many people invest in Texas oil rather than investing in countries such as Angolia or Indonesia knowing the US's economic history and the economic turmoil that coincides with underdevelopment. Theory is used many times in viewing of risks. Development is seen as lower due to less excitement.
Development is thought to bring about less answers than the study of economic theory. It is also longer to view. What does pride do to a person. Does it make a person better off to know that they have the best parks in the region? How long will this take to understand and what answers does it bring?
Kuttner in "The Poverty of Economics" shows that econometrics might not neccessarily be the "best way" to view a model. There are always more variables than the model considers. Econometric models do not know the future
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Economic theories, Schools of economic thought, Economic model, Development economics, Econometrics, Economics, Kenneth E. Boulding, Mainstream economics, Pranab Bardhan, Mathematical economics, Kaushik Basu
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