The experience of Mr. Card’s graduate students suggests how the process can work. Mr. Card is by no means on the fringe, but he said his research on the minimum wage in New Jersey “caused a huge amount of trouble.” He and Alan B. Krueger, an economist at Princeton, found that contrary to what free-market theory predicts, employment actually rose after an increase in the minimum wage.
When Mr. Card’s graduate students went on job interviews, he said other economists would ask questions like “What’s wrong with your adviser? Has he started drinking?”
This is why Mr. Blinder said he advises graduate students “not to do what I do” when it comes to challenging the standard model.Criticizing the approach that currently dominates the field, Mr. Blinder said economists must look more closely at the real world instead of modeling it in the lab. “Economics is insufficiently scientific,” he said. “Mathematics may be useful, but mathematics is not scientific. It doesn’t generate refutable hypotheses.”
Friday, July 22, 2011
Via HP's delicious links, an interesting NY Times article from 2007 on the plight of heterodox economists, and the reliance of orthodoxy on mathematical models and plausible sounding theories as opposed to the more scientific approach of confirmation with test data. Here's an excerpt: