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Tyler Cowen summarises what economists have learned over the past year, in this New York Times column. Protectionists of all kinds, but perhaps in particular American protectionists complaining about China unfairly undervaluing its currency, should read the part about China, which points out that the country is not as economically strong as we thought it was, indicating that perhaps the yuan is not so undervalued after all.

Other interesting tidbits is that sales went down for the music industry, in spite of the fact that people are buying more digital singles, and that — in spite of global warming hysteria — more people still die from cold spells than heat waves. It’s a worthwhile read.

Cowen ends his column with these words:

THE common thread in these various discoveries is a careful use of data and an interest in real-world problems and puzzles. In accord with the trend in the profession since the 1990s, there haven’t been many significant advances in pure theory over the last 12 months.

Many major debates of economics remain unsettled. We’re still not sure what is driving the increase in income inequality. It is common to cite globalization and the ability to sell to the entire world, but the surge in top incomes does not seem to be coming in the most globalized sectors. We’re also not sure whether 2008 will bring a recession or slow but continued growth.

Knowledge is a wonderful thing, but sometimes simply knowing what we don’t know is a form of understanding. So beware the one-armed economist; sometimes a good economist could use two or even three arms or more.

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Andra intressanta bloggar om: ekonomi, 2007
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