Do We Have Confidence in Economic Institutions?
Welcome to Rebuilding Macroeconomics' Macroeconomic Institutions Hub
At the centre of this hub is a socio-cultural analysis of the ethos, knowledge practices and social hierarchies within the tribe of economists. It will reflect on how universities, central banks and government departments might diversify their forms of knowledge and networks to generate more equitable and effective policies.
The outcome will be a series of initial recommendations about how we might rebuild macroeconomics into a more policy-relevant discipline that acts for the public good. We will achieve these aims by looking at cultures of expertise in two linked sites: academic macroeconomics and economic institutions. It is through academia that economists are socialised, and it is through the policies of economic institutions that their ethos and networks impact on all of our lives.
Economics, like many disciplines, is hierarchical. But unlike experimental sciences, where existing orthodoxies are regularly challenged and overturned by experiment, economic ideas can be maintained by doctrine. It might be argued that this is a necessary component of a non-experimental science. But the events of the financial crisis have led to a widespread perception that the existing dominant approach, DSGE and New Keynesian economics, is broken and it is time for a major shift in knowledge practices. Policy makers have been experimenting in an improvised fashion with new kinds of measures, but changes in dominant forms of knowledge have been slow to emerge. We would like to reflect on why this is and how we might intervene in cultures of expertise and social networks to change this.
Orthodoxy could be perpetuated through a “culture of expertise” in which certain views are encouraged versus others. Academic cultures of expertise and social networks socialise the new generations of economists into their professional ethos. This socialisation is built around exclusionary practices of identifying genius, mentorship and good performance. It occurs through implicit and explicit means in the classroom and outside.
Senior members of the American Economic Association have been predominantly drawn from five elite US institutions. There is a similar concentration of power in the award of prestigious Sloan Fellowships which act as a signal to the profession as to who are rising stars. The same concentration is found in the editorship of top journals, which is potentially problematic because promotion is often linked to publication. This gives economists the incentive to publish merely to appease the editors for the sake of their careers, and may well prevent the dissemination of alternative views.
We intend to examine macroeconomic institutional landscapes such as finance ministries, central banks, multinational institutions and government departments and explore their cultures and social networks. We look to examine to what extent these limit innovation, and how policy orthodoxy impacts in unintended ways on the economic activities and social networks of banks, firms and the public.
We seek proposals to help develop new macroeconomic approaches and to test these by relating policy action to its dispersed, unintended consequences in society. We also wish to explore experimental forms of coordinated planning, institutional structure and democratic communication that may redress the current lack of legitimacy of economic institutions.
Hub-Leader: Prof Gary Dymski
Gary Dymski is a Co-Leader for Rebuilding Macroeconomics’ ‘Do We Have Confidence in Economic Institutions?’ Research Hub and a Professor and Chair in Applied Economics at the Leeds University Business School, University of Leeds. He received his BA in urban studies from the University of Pennsylvania, graduating Phi Beta Kappa in 1975.
He received a doctorate in economics from the University of Massachusetts, Amherst in 1987. He was a member of the economics faculty at the University of Southern California from 1986 to 1991 before joining the UCR economics faculty in 1991.
Professor Laura Bear was a co-leader of our macroeconomic institutions hub, but stepped back from further involvement on becoming Head of Department (Anthropology) at LSE. We are extremely grateful to Laura for her involvement.