A couple of days ago in
Big Think there was an interesting post with the views of 'Eight of the world's top young economists' on where the field is or should be heading.
Here are some quotes which may make you curious to read the full post:
NICHOLAS BLOOM, 39 years old at Stanford
'…Why
are developing countries poor? In terms
of impact on mankind globally, this strikes me as probably the biggest and most
important current economic question. I
think the answer is complex and linked to a combination of factors around
history, geography, luck, etc. I am
personally working on management practices: people in developing countries are
poor because wages are low, and wages are low because firms are very
unproductive, and firms seem to be unproductive in large part because of bad
management. An Indian worker makes in
one week what an average U.S. worker makes in a half a day. One big factor seems to be that factories in
India are frankly very badly managed: equipment is not looked after, materials
are wasted, theft is common because inventory is not monitored, defects keep
occurring, etc…'
RAJ CHETTY 32 years old at Harvard
'…Many
economists are concerned with two broad questions: how can we increase the rate
of economic growth and overall well-being, and how can we reduce the rate of
poverty? Countless policies—taxation,
education, healthcare, etc.—have been implemented in an effort to achieve those
objectives. One of our biggest
challenges is to distill each policy’s unique impact so that we can understand
which ones actually work and which ones do not. '
XAVIER GABAIX, 40 years old at NYU
'…The
most central open question in economic theory, as I see it, is how to model
realistic economic agents.
Traditionally, economists have relied on the rational-actor model, but
it is clear that it is just a rough caricature.
It has been greatly enriched by behavioral economics in the past 30
years. Still, we are far from a unified,
versatile, believable alternative to the rational-actor model. I am hopeful, though, that this might be
overcome—in part because of progress in the sister disciplines (psychology and
neuroscience) and basic modeling, and also because empirical anomalies are
forcing the economic profession to be more open-minded. Contributions by computer scientists and
physicists will help inject new perspectives into economics.
The
largest concrete questions in economics are, arguably, how to increase
growth—particularly in developing countries—and how to avoid economic disasters
and financial crises…'
Peter Leeson, 32 years old at George Mason
University
'…My
candidate for the biggest unanswered question in economics is the status of the
rationality postulate: the decision to analyze actors as utility maximizers
with consistent preferences. If we view
economics as an “engine” for understanding the world, the rationality postulate
was that engine in nearly all of economics until quite recently. The rise of behavioral economics has
challenged the usefulness and, in a more subtle but radical way, the legitimacy
of the rationality engine.'
Glen Weyl, 27 years old at the University
of Chicago
'…In
his famous 1945 article, “The Use of Knowledge in Society,” F. A. Hayek argued
that despite their inequity and inefficiency, free markets were necessary in
order to allow the incorporation of information held by dispersed individuals
into social decisions. No central
planner could hope to collect and process all the information necessary for
social decisions; only markets allowed and provided the incentives for
disaggregated information processing.
Yet, increasingly, information technology is leading individuals to
delegate their most “private” decisions to automated processing systems. Choices of movies, one of the last realms of
taste one would have guessed could be delegated to centralized expertise, are
increasingly shaped by services like Netflix’s recommender system..'
Justin Wolfers, 39 at UPenn
'…Economics
is in the midst of a massive and radical change. It used to be that we had little data, and no
computing power, so the role of economic theory was to “fill in” for where
facts were missing. Today, every
interaction we have in our lives leaves behind a trail of data. Whatever question you are interested in answering,
the data to analyze it exists on someone’s hard drive, somewhere…'
Poverty and development issues, the limitations of rationality, huge disaggregated data sets and vast computing power.....
