Incentive problems in econ?

So there has been discussion on incentive problems in economics here before (here, here, and here).  However, now there seems to be a little bit of hard empirical evidence indicating that there is a problem.

It seems that 51% of graduate students at the top 15 US universities think that knowledge of the actual economy was “unimportant” for doing a degree in economics.  These weren’t people saying “a little important” or “I’m not sure”, these are just the ones saying “it does not matter at all”.

Now, if the best graduate students do not believe that the actual economy matters for economics that suggests to me that there is a major incentive problem – the same sort of one that Rauparaha tried to convince me about so long ago

6 replies
  1. rauparaha
    rauparaha says:

    The problem is that academic and applied economists are both referred to as ‘economists’. That causes confusion because they have very different roles. They really need different titles, just like astronomers and astrologers, or scientists and scientologists. You assign those across the practitioners and academics according to your personal prejudices 😉

  2. Matt Nolan
    Matt Nolan says:


    My guess is that astronomers are interested in understanding the “actual functioning of objects outside the Earth’s atmosphere”.

    Surely to do economics at all you have to have a goal of actually looking at something related to the actual economy right. What is the ultimate goal of academic economics if it has nothing to do with the actual economy?

    Now I think academic economists do hold some ultimate view on how their work relates to the actual economy – I am just surprised to hear so many grad students saying it doesn’t matter at all.

  3. rauparaha
    rauparaha says:

    @Matt Nolan
    I see theorists and applied researchers as almost analogous to physicists and engineers. I’m not sure that I’d actually distinguish between academic and non-academic economists. I don’t think that distinction has a lot of merit since many academics do work on very practical, interesting problems. At the same time, a lot of economists – both academic and otherwise – appear to add little of value.

    I’m still convinced that the value of many private economists is no greater than that of professional investors: they just serve to reassure people that ‘something is being done’ while actually doing nothing of economic interest. Not that there’s no merit in making people feel happier and more secure!

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