The Return of History

These days economists do lots of abstract math but know little about history.  This wasn’t always the case; until the Depression, the history-heavy and math-light Institutionalists were the dominant school.  But as the Depression dragged on and the Institutionalists had no major new ideas to fix it, Keynes and the modelers took over both policy and economics.

Mathematical modeling has continued to be the dominant tool of economics until this day.  But with the not entirely satisfactory response of mathematical economics to the financial crisis and recession, it seems that people are once again turning to history.  I get the sense that Reinhart and Rogoff’s This Time Is Different: Eight Centuries of Financial Folly has been the book economists most took to heart in this crisis.

I am certain that at the margin economists do too much math and too little history.  I hope to do my own small part to address this misallocation, and I am glad to see that Reinhart and Rogoff have made such a big move with such success.

Thought Catalyst

Brain output is quite variable, presumably because brain input is similarly variable.

So when is it that you think best?

For me, its in math classes.  My brain recognizes the diffuculty of the problems being presented, calls up the reserve power, then proceeds to apply it to any problem except the one being presented.  I should really just hang out in math classes all day without taking them and their associated grades.

XKCD

I’ve been reading webcomics for a few years now- Penny Arcade, 8-bit theatre, ctrl-alt-delete.

But I think I just stumbled upon the greatest- xkcd.

The author has so many of the same thoughts I do, except he is way funnier and better at expressing them… and better at math too.