The role of ideology in disagreements among economists. A Quantitative Analisis:

How justified is the charge that ideology strongly influences the allegedly objective opinions of economists? An analysis of a new survey of AEA members and of surveys by Fuchs et al of labor economists and public economists shows that value judgments and judgments about the government''s efficacy have some influence on the way economists think about what should be purely economic issues. But such influence is not strong enough to explain much of the disagreement among economists.

Do Changes in Asset Prices Denote Changes in Wealth

When stock or bond prices drop sharply we are told that the nation''s wealth has fallen. Some commentators go beyond such a vague statement and calculate how many billions of dollars of wealth have been wiped out by multiplying the percentage change in stock prices or bond prices by the previous value of outstanding stocks or bonds. This appears sensible and indeed obvious, and if the figure looks huge, for example, $2.1 trillion (about one quarter of annual GDP) for one week in April 2000, so be it. Yet, when we look at the real economy it also seems obvious that the nation''s stock of capital is the same as it was the day before the market crashed. Our factories can turn out just as many shoes, ships and tons of sealing wax as before, and our fields are just as fruitful. To be sure, if bond prices fall the value of claims we have on each other is less, but except for our net claims on (or liabilities) to foreigners, the gains of debtors and the losses of creditors wash out when we look at the nation as a whole. Even the change in the value of government debt washes out because the debt is the liability of taxpayers.

The ECB's Policy: The view from the market

currency; economic integration; EMU; Euro; European Central Bank; political economy

Misinterpreting a Failure to Disconfirm as a Confirmation: A Recurrent Misreading of Significance Tests

When a significance test fails to disconfirm a hypothesis economist often interpret this as evidence that this hypothesis is valid. Six such examples are cited from recent journals. But this is a misinterpretation of what significance tests show. Presumably this misinterpretation is founded on the valid principle that every failure to disconfirm a hypothesis adds to its credibility. But that principle defines â??failure to disconfirmâ?? in a way that differs sharply from the way that this phrase is used in the context of significance tests. Some ways of ameliorating this problem exist.significance tests, t values, t coefficients, confirmation

The Monetarist Policy Debate: An Informal Survey

This paper surveys the monetarist position on various aspects of American monetary policy in an informal way and provides the personal reactions of a participant observer in this debate. It emphasizes the intellectual milieu in which monetarism emerged, the background factors that facilitated that emergence, and the relation of monetarism both to ideology and to current thinking about monetary policy. Rather than focus on whether the monetarists were right or wrong, it evaluates some aspects of the effectiveness with which the debate was conducted.monetarism, monetarist policy, Friedman, Brunner, Meltzer

THE INFLUENCE OF FRIEDMAN'S METHODOLOGICAL ESSAY

Many leading methodologists have described the central role that Milton Friedman''s 1953 essay (henceforth referred to as F53) has played in methodological discussions. (See for instance Daniel Hammond, 1998; Kevin Hoover; 2001; Roger Backhouse 2002.) However, it does not necessarily follow that it has had a great influence on the practice of economics, because practicing economists pay little attention to free-standing discussions of methodology; at best they learn their methodology by seeing it put to work on substantive problems.1 Arguably, Friedman and Schwartz''s (1963) A Monetary History of the United States, has had more influence on the methodology of practicing economist than did F53. The most pervasive methodological influence in macroeconomics in the last thirty years has been the insistence of new classical economists on reducing macroeconomics to microeconomics, and in this they paid no attention to philosophical debates about reductionism

THE DOMAIN OF THEORIES AND TESTS BY THE REALISM OF ASSUMPTIONS

The principle that theories should be tested by the accuracy of their predictions but not by the realism of their assumptions needs to be qualified. As a practical matter we often need to evaluate the applicability of theories to cases for which they have not been tested by their predictions. Here we rely on the fact that theories are applicable only within a specific domain. In determining whether a specific case, for which no direct tests are available is within the theory''s domain, we look primarily at whether the assumptions of the theory are as applicable to it as they are to the cases for which the theory has been successfully tested.

WHAT REMAINS OF THE MONETARIST COUNTER-REVOLUTION?

The widespread belief that monetarism has failed is open to question. Certain strong monetarist positions have been damaged by unfolding events, but more moderate propositions live on in current ""Keynesian"" consensus.

Honesty and Integrity in Economics

When looked at individually there is little reason to think that economists lack integrity and are dishonest. Yet, when we look at academic papers written by economists we can see biases. This paper tries to reconcile these two observations by arguing that the constraints the profession sets on permitted practices are loose enough to allow economists to maintain their biases while conforming to the mores of their profession. There is little reason to think that economics is worse in this respect than some other fields.honesty, integrity, culture of economics, significance tests, data mining

THE RHETORIC OF FRIEDMAN'S QUANTITY THEORY MANIFESTO

In 1956 when Friedman published his ""The Quantity Theory of Money: A Restatement"" he faced a daunting task because of the widespread hostility to the quantity theory. This paper looks at the rhetoric (in the non-pejorative sense of the term) that he used to overcome this obstacle, and at some of the characteristics of the essay that contribute to its persuasiveness.