Do We Have Confidence in Economic Institutions – Summary Note
17 NOVEMBER 2017

1)Are there institutional constraints that limit innovation in academic macroeconomics?

Introduced by Kevin Hoover, Duke University

Kevin suggested that constraints to innovation in Macroeconomics exist. It is impossible to know what innovations have been restricted thus far, and how the discipline might have looked if such change had proceeded. We have to question whether non-mainstream approaches would be any more fruitful than the orthodoxy. If we accept that the alternative approaches are superior to those of the orthodox view, then there is then a sociological follow-up to ask how the dynamics of the discipline mitigate against the development of such ideas. Many critics of Macroeconomics have a sense that better ideas are systematically excluded, but there is considerable disagreement as to which of these ideas are in fact better. A more pertinent question might be as to whether there are institutional constraints which deny a fair hearing to alternative perspectives.

A “market for ideas” view would suggest that this issue has been resolved: heterodox views are marginalised because they have failed to establish themselves as credible alternatives. This view can probably be dismissed, but that would invite another sociological question: do the mechanics of the profession promote the epistemology of competition implicit in the “market of ideas” metaphor? Kevin’s work on the leadership of the American Economic Association (AEA) suggests that some institutions may have market power.

The AEA has 21,000 members. Between 1982 and 2014, 42% of AEA offices were occupied by scholars at Harvard, MIT, Chicago or Stanford and 71% had doctorates from the same four institutions. The AEA is dominated by people associated with less than 3% of the PhD granting institutions in the USA. Going beyond those four, there are very few economists not associated with the top six to eight universities who play any role in the management of the AEA.

The question then arises as to whether these numbers reflect merit, in the form of research excellence and achievement, or do they represent the operation of self-perpetuating privilege? The answer here is not obvious, and it is difficult to obtain unbiased objective evidence. Another question is whether the leadership of a large, influential organisation should be chosen on the basis of scholarly achievements, or on whether they are effective at representing the professional interests of their members.

The nomination process is not open, so the choice of candidates is determined by a select group of people. This all matters because the AEA has control of the six of the most important economic journals, and of the largest job market in Economics. It dominates the Allied Social Science Association, which controls the agenda for a large number of Social Science organisations, including heterodox ones – so that the mainstream thus operates some degree of sanction over the development of heterodox thinking. There are 153 USA institutions which award PhDs in Economics, many more that grant Master’s degrees, and over 200 that provide Bachelor’s degrees. Because the AEA is the premier economics professional organisation in the US, its AGM helps to set the agenda of the American and World Economic profession.

A further issue relates to the mechanism by which the leadership is nominated and chosen. The AEA is only an example here; it is not the only organisation which might act as a constraint on non-orthodox thinking that might be investigated. The Econometric Society is another such body. The National Bureau of Economic Research, whilst not a professional organisation, is one which confers benefits on its members by promoting their work. The canonical ranked list of journals have inadvertently promoted the agenda of American economics, given that the journal editorial boards are dominated by American professionals, and thus reflect US thinking and values; this is an unintended consequence of decisions made by European publications.

The discussion began with Laura Bear asking for views on the mechanics of appointments and promotions within Universities; could the promotion criteria within academic institutions reinforce the orthodoxy. Some apparently small-scale decision-making procedures may actually have considerable consequences and need to be challenged. Kevin focused on the fact that promotion often depends on publications in particular journals, and how self-reinforcing this process tends to be. The system tends to be misunderstood in the sense that individual universities can develop their own characters and specialisation. The mechanisation of standards has not been helpful in the promotion of diversity of research.

David Tuckett wondered how this approach would be perceived if placed in a comparative framework, to include Chemistry, Physics, History and so on. He thought that the results would vary depending on how far the disciplines concerned were based on empirical research. Other fields have a much broader input of research funding. Moreover, US universities have many more funding sources than UK counterparts and there is very little diversity of institutional structure in the UK.

Tony Curzon Price asked if the historical dimension might be put back into the story; in that the heterodox view of the Chicago School became the orthodoxy, and this orthodoxy is now possibly losing sway. This was a remarkable change; and can be seen as the result of an intellectual battlefield against the background of the Cold War, rather than an academic marketplace. Kevin suggested that results from his research on the History of Post-war Macroeconomics, suggest that the influential institution is really MIT rather than Chicago, and that Chicago now looks more like MIT than the other way around. Roger Farmer suggested that Minnesota, rather than Chicago, has been the more influential institution in terms of the development of Macroeconomics.

Richard Bronk suggested that a Kuhnian perspective, whereby a paradigm is replaced following a crisis, is misguided. In his view, the idea that there should be one paradigm dominating at one time is a mistake. Kevin thought there had been a lot of post-crisis requests for alternative approaches to be allowed to flourish; but the question is how to make it possible that ideas can be put into adequate and fair competition with the mainstream. Leaza McSorley followed up wondering if it is possible for orthodox and heterodox approaches to be used complementarily. Indeed, the greater competition should make the mainstream stronger. At the moment it is difficult to see the intellectual space for cooperation.

Beatrice Cherrier wanted to see a greater historical understanding of how orthodox macroeconomic models have come to be regarded as “better” than heterodox alternatives over the course of last 50 years; and, indeed, what the term “better” means, or has come to mean, in this context. The notion of what constitutes “superior” has itself changed considerably over time. Kevin agreed that “truth” has to be considered in the context of achieving pragmatic goals. In the context of the RM project, the issue is not so much the history of developments in the past, but of what our own pragmatic goals are, and how they might be promoted.

Roger Farmer suggested that because it is so hard to experiment in Macroeconomics, the “oligopalisation” of ideas is actually quite important. The notion of the “priesthood” curating the “religion” between extreme events is useful, as the existence of too many competing ideas causes incoherence and stasis. However, extreme events such as the Great Depression, the Great “Stagflation” of the 1970s, and the Great Recession, have each caused significant disruptions, and at these times it is very obstructive to have a “priesthood” restricting the development of new ideas. Kevin aligned this analysis with that of Kuhn, whom he sees as an advocate of this kind of normative scientific discourse. He is also not necessarily convinced of the long-term impact of the Great Recession; we have seen the DSGE framework exhibit considerable resilience absorbing this recent shock.

Angus Armstrong highlighted the difference in financial structures between US and UK universities, and the consequence for the acceptance of new ideas; he noted in particular the variety of funding sources in American institutions. LB followed up on RF’s point about the disruption of models from external shocks, but noted that the effect of the growing networks between academic and financial institutions since the 1980s, in the form of neo-classical policies, has been that academic knowledge is being pushed back by events that it has itself helped to generate. Hannah Dewhirst noted that the policymakers who have implemented economic frameworks which have led to these external shocks have probably themselves studied economics, and thus represent in practice the academic influences to which they have been exposed.

2)Are there cultures of expertise that ensure the mainstream paradigm is particularly prominent in academic macroeconomics?
Introduced by Sheila Dow, Emeritus Professor of Economics, University of Stirling

Sheila stated her view that the content of Economics is inseparable from the sociology and epistemology of the discipline. A focus on the epistemology of the mainstream helps us to understand the content of what is dominant within that academic framework; and also gives an explanation as to why that dominance has been so persistent. It also helps to clarify the ways in which macroeconomists interact with government policy-makers, and how governments perceive the roles of economists. Equally, this dynamic throws light on the interactions between economists and the general public, and the ways in which Economics is viewed in a wider perspective.

Sheila’s starting point was the idea of ‘Economics as a Science’, which perpetuates a rather dated idea of the distinction between Science and non-Science. This framework sets the boundaries for Economics: the subject is defined as being an enquiry into economic questions which fits that mode or method of enquiry. In this understanding, heterodox views are not so much pushed to the margins, but simply not seen as being part of Economics. This issue highlights the extent to which this sociological structure reflects academic quality or, more simply, the practice of power. The mainstream has successfully created the impression that its mode of enquiry is the best way of approaching the truth, so that alternative methods need not be considered.

It has been suggested that the use of mathematics takes us away from these issues of choice and subjective power, and that maths is a neutral “language” which promotes greater precision. There is however so much that is lost in this understanding of the role of maths, which is not “neutral”; it colours the way in which we understand economics. There is a view that formal mathematical modelling is the dominant language of economics; and the view is often expressed that what we need is better models, which feeds into the Kuhnian discussion mentioned earlier. This is still perpetuating the same understanding of what economics is about.

There is a problem with defining the academic subject of economics largely or entirely in the context of formal mathematical modelling, and making this perhaps the supreme criterion of quality. Many discuss economists as “rational economic men”; so this becomes a rather circular way of discussing the institutions of economics. Economics is presented as an area of technical expertise in which the general population need not feel any incentive to become involved, and from which policy-makers need only accept the outcomes. In particular, the argument is that the discipline is value-free; it is presented in textbooks as a positive science which does not involve or engage with values. In fact, economic policies raise numerous value judgements, and democratic implications, in which economists are increasingly viewed as being implicated. Non-mainstream perspectives accept the role and influence of values, but these issues need to be brought to the surface in discussions with policy-makers and the wider public.

Sheila suggested that the Kuhnian conception of one paradigm being replaced by another is not satisfactory, derived as it is from a framework developed mainly for the Physical Sciences. Her own view is that Kuhn’s model helps us to understand what each paradigm consists of, in terms of world view, and mode of understanding in building academic theories. Academic communities need structure, and cannot be based on numerous individual perceptions. A genuine pluralism, however, would be more structured and would allow for a healthy diversity of viewpoints.

Angus Armstrong added that the specialised use of language also shaped how non-specialists view macroeconomics. For example, the notion that mainstream models are designed for policy evaluation is not the same things as them being regularly used to evaluate real-world policies. Ali Norrish added that research by, about what economics means to the wider public, with lower income households regarding “the Economy” as being linked purely to financial management and the balancing of budgets. There is thus a real gap in terms of the ways in which economics is understood, which could potentially result in questions of political legitimacy.

Laura Bear felt that there is a deeper point here, which relates not just to how the public understand economics, but what they think economics should be for. People may not understand economics, but they have a very good understanding of their incomes and how they are affected by policy changes. There is a chance to engage with people more closely about what they want an economy to do. She referred back to Sheila’s point about not thinking of economics as being solely a science; so doing might in itself generate plurality, with perhaps a “Social Science of Economics” being brought forward.

Leon Wansleben asked whether targeting the ideology of Economics might in fact mean that the wrong problem is being addressed. He felt that the circulation of “symbolic capital” between academic institutions and government departments doesn’t have a great deal to do with ideas as such; and that most contemporary students do not really know or even care much about where the ideas which frame their studies have come from. SD agreed that very few students nowadays learn the history of their discipline, which in turns colours the understanding of the discipline. Peter Barnes commented that the economic histories of countries are also relevant to the ways in which economics is understood.

Daniel Souleles expressed the view that a lot of policy-makers have economic backgrounds which are influenced strongly by mainstream thinking; but there are also quite a lot of people who have not had any formal economic training. He thought it helpful to view economics not as a discipline but as a set of epistemological practices, which do live in academic institutions but also inhabit other areas as well. He wondered how this epistemology could be changed to make it more inclusive of other perspectives. Sheila’s opinion was that arguments are tested and made stronger if they have to be developed in the context of criticism and of alternative viewpoints, and thus a measure of plurality should be seen as strengthening both mainstream models and  alternatives insofar as they are correct and fit for purpose. As things stand, much of people’s behaviour is framed by perceived normality in the systems and institutions within which they are based.

Lucy Barnes stressed that much of the discussion would fit smoothly into the arena of Political Science, in terms of values, democracy, and quality. Whilst Political Science might be a widely misunderstood discipline, there is a potential for this discipline to influence the discussion. She also put forward the opinion that Political Science has suffered from pluralism in terms of not having a clear identity, and that this might be a warning to economists who are advocating pluralist viewpoints within their discipline.

Richard Bronk responded that no-one is arguing that economists should try to become anything other than economists; the argument is that economists should attempt to work with people from other disciplines to improve their understanding of the pros and cons of their own models, whilst remaining remaining true to their own academic area of comparative advantage. He wondered, though, whether the wrong area was being addressed in terms of seeking quality; there is a feedback loop which internalises a utilitarian framework for judging quality of research. Journals, for example, are given objective rankings in order to allow for subjective judgements to be downplayed and marginalised in recruitment and promotion. The quantification of expertise has become a widespread problem, not limited to economics.

Jack Wright commented that notions of pluralism in the Physical Sciences are somewhat different to those being discussed here; that in Physics, Biology and Chemistry, such ideas would relate to feedback and evaluation mechanisms, but not to central modes of thinking. There is thus a need to be clear about the kinds of pluralism that are being sought, and as to whether the Physical Sciences do in fact provide realistic options.

Hannah Temple felt that some of the issues discussed are, to an external observer, somewhat obvious: particularly as regards silos in institutions, which restrict and negate cross-communication. There is very strong demand amongst school students for pluralist approaches, but these appear to be lost when people move on to study at universities. The funding of universities, and the role of the REF, are very significant factors in forming and shaping disciplinary cultures.

Marcus Dietsch was struck by the similarities in the relationship between science and politics, where similar breakdowns of trust and communication are taking place – particularly in terms of addressing issues of public understanding of science. There is a converse issue relating to scientists’ and economists’ understanding of the public, and how the public should be engaged with, informed, and consulted. The experience of crises in science helped to promote new attitudes to the public, with beneficial inputs to the research and communication agenda.

Sheila suggested a number of research topics that could be grouped together under this particular Research Hub:

Economists’ ethics – issues of democracy, public engagement, development and presentation of macroeconomics.
Input from psychology for an understanding of the discipline of economics, for example on why heterodox ideas are not seen by the mainstream (as in the example of only re-switching being seen in the capital controversies and not the more fundamental arguments).
Discourse analysis of macroeconomics, drawing for example on McCloskey’s distinction between formal and informal discourse.
Bibliometric study of the macroeconomic literature – for example, papers with greatest impact may not be in top journals, and may be better appreciated initially within other disciplines.

Econometrics – the relevance of debates in econometrics for different views on the nature and role of evidence.
Developments in macroeconomics in terms of the relative importance of pure theory, applied theory and applied statistics.
Identifying the values implicit in macroeconomic theory.
Pluralism: its meaning and role in macroeconomics.

3)How are new ideas transmitted between academia and policy institutions?

Introduced by Beatrice Cherrier, University of Cergy

Beatrice’s introduction was concerned with the history of our current situation. She addressed the issue of the perceived disconnect between academia and policy institutions, despite a global increase in the number of trained economists. She pointed to discrepancies in the way that people act, depending on whether they are functioning as academic researchers or as policy advisors. There has been a move by many institutions to adopt DSGE models, though this does not necessarily mean that earlier models have been disowned. There is thus more pluralism in practice than is often admitted in public. The outward emphasis on DSGE may reflect a desire of central banks to be ‘best in economic theory class’ rather than reality.

To understand the relationship between academic and policy versions of macroeconomics, a fine-grained picture is necessary. In the mid-1960s, it was the Chair of the US Federal Reserve Bank who decided on interest rate changes; and that Chair was usually not an economist, so economists needed to develop appropriate strategies in order to inform and influence these decisions. Forecasts and alternative scenarios thus had to be drawn up and presented in ways that were intelligible to the intended recipient (though a green and blue book). We still don’t know who was successful in these representations, and how decisions were affected; it would be helpful to research this time period more fully. The Fed is being asked to release their archive in order to help with the research process.

More recently, in the 1980s, a big question related to how the ideas of Lucas, Sargent and Sims were adopted so quickly and to such great effect. Beatrice has studied winners of the John Bates Clark Medal, a significant indication of the circulation of symbolic capital within the discipline. The majority of medal recipients came from a range of only ten institutions, and half of them had gained their PhDs at either Harvard or MIT. Macroeconomics, however, is an exception. What is striking in terms of Macroeconomics is the make-up of the group that did not receive medals. Very few macroeconomists did so, even if they won Nobel prizes. Lucas, Sargent, Sims and Prescott were not recipients.

The common thread is that the scholars from the University of Minnesota built their own economic institutional culture in ways that differed from Chicago, Harvard and MIT. Minnesota had built close links with the Federal Reserve Bank of Minneapolis, and focused its publications effort largely on local journals; and set up a new PhD programme focusing on macroeconomics and econometrics, which eventually brought the university into the top tier of American institutions. This was largely a story of relationships being developed outside academia, rather than within. This suggests that ideas and models are developed in a “two-way street” between academia and policy-making.

Beatrice pointed out that the multiplicity of levels on which macroeconomics operates is unusual. It is not clear as to how these levels have been created, nor for what purpose; but they have the effect of distorting and confusing debate within the discipline, and of obscuring the image and detail which is presented to the wider public.

Roger contributed his own recollections of Minnesota’s rise to dominance, based on his own experience of working in the US at that time. Harvard and MIT got the brightest students; Minnesota took people from the next tier, and gave them an ideology, which was strongly scientific and mathematical in nature. Harvard and MIT were seen as the “enemy”; and Minnesota graduates became greatly in demand through both North America and Europe. BC confirmed Minnesota’s climb to macroeconomic supremacy was based on intensive econometric training. RF noted that Prescott eventually dismantled this model.

Laura asked whether there are links between the “pipelines” from academia into policy-making institutions, and those into other international organisations, such as the World Bank. Beatrice was not aware of any formal studies into this area, but thought that such research might well be interesting and rewarding; the World Bank has a very distinctive culture, which differs substantially from government departments.

Leaza McSorley suggested that the “two-way street” is not just between academics and policy-makers, but also involves ordinary people, who are becoming aware that the economic facts which state that the macroeconomy is performing well does not correlate with their own lived experience of stagnating wages and the gig economy. There may need to be a focus on an intra-disciplinary understanding of the mechanics of macroeconomics, in order to reconcile these competing viewpoints. Maeve Cohen recounted the experience of a group of people who had worked in Rethinking Economics, and had gone on to work in the Civil Service and to set up an organisation there called “Exploring Economics”, which has attracted a considerable and positive response. This has contrasted sharply with attempts to influence Civil Service thinking from the outside.

Mary Morgan thought the discussion might move on to include “institutional enablement”, covering situations and practices which enable policy-makers and academic economists to have more personal and institutional interaction. Small countries have very different set-ups to big countries; so that in the USA, only a very small percentage of economists actually have access to any kind of policy space. In small countries, a much larger proportion of economists will have a chance to participate in policy-related discussions. When she worked in the Netherlands, she shared an office with the Head of Research for the Central Bank; and next door was the Head of the Central Planning Bureau; and even in her role as Professor, she was classed as a Civil Servant. The institutional set-up was thus completely different to the USA and the UK: there was an insistence on these kinds of formal interactions in order to shape and support policy development.

Peter Kenway noted the role of the Minneapolis FED in promoting the advancement of Economics at the University of Minnesota, and suggested that the UK suffered in comparison, by being both big and highly centralised, so that examples of such regional support are rare and are not encouraged by institutional structures.

Richard Bronk suggested that senior management in the Civil Service and ministers no longer want pluralistic thinking, with diverse options considered in “on the one hand, and on the other hand” briefs; the goal is now to provide clear undiluted answers to ministers’ questions. Models are required to provide single answers, rather than the pros and cons of multiple options being offered to ministers and senior officials whose job it is to make difficult judgements. DT agreed with this viewpoint, and suggested that the Civil Service approach of needing a model to support a policy action should be examined and researched. Jack Wright expressed the view that there is a risk that close interactions between academics and policy-makers may be interpreted as, and may actually be, a form of exclusive elitism, which actually mitigates against wider democratic involvement in decision-making processes.

4)Do networks create monocultures in macroeconomic policy-making institutions?

Introduced by Richard Bronk, European Institute, LSE

Richard was concerned not to denigrate the standard economic paradigm; but believed that it needs to be complemented by networks devoted to modelling pluralism. Professional networks may lead to monocultures if they are homogenous and dedicated to the illusion of “Best Practice”. In the right hands, networks can be the basis for “disciplined eclecticism”, allowing the use of whatever theory is best suited to a particular problem.

The standard economic paradigm is the most successful social science paradigm in history, in terms of what it helps us to understand. Its proponents, though, are guilty of a form of academic imperialism which seeks to explain all problems via the same tenets of rationality and optimal equilibria. The paradigm is also obsessed with being a predictive science, based on parsimonious assumptions, and is thus unable to cope with the messiness of reality unless it can bolt on amendments to its core rational choice model that capture systematic biases and behavioural regularities. The profession is also blind to the ways in which its models and assumptions tend to bias and prejudice its own analysis.

There are three intellectual problems underlying these issues. Firstly, standard economics ignores the central importance of radical uncertainty or indeterminacy caused both by incessant innovation and novelty and by frequent changes in political trade-offs between incommensurable values. By ignoring the highly creative and necessarily political nature of economic systems – it puts too much faith in the ability of modellers to predict behaviour on the basis of  revealed preferences, objective probability forecasts, and optimization among  given factors and constraints. In conditions of uncertainty, there is no optimal choice, there are no objective probabilities, and there is no single correct model.

Secondly, standard economics ignores the ineffable complexity of socio-economic systems – not just in the technical sense of emergence and non?linear dynamics, but also in the ordinary sense of social reality being multifaceted. It is this that ensures the inevitably partial nature of any single theoretical, modelling, or conceptual perspective on reality. We need theories and models to make sense of the chaos around us in the same way we need a light to see in the dark. But if we only have access to one theory or set of models – one source of light – then our field of vision is limited and our analysis biased. This is the danger of analytical monocultures. As Peter Diamond put it in his 2010 Nobel Prize Lecture: ‘The complexity of the economy calls for the use of multiple models that address different aspects … It is worth remembering that models are incomplete – indeed, that is what it means to be a model.’ Each model should be seen as a diagnostic tool for teasing out such systematic tendencies as do exist and spotting newly emerging patterns.

The third mistake economists and policy practitioners make is to ignore the extent to which their analysis is embedded in particular analytical practices. As social anthropologist, Pierre Bourdieu, and philosopher, Ludwig Wittgenstein, understood, the conceptual structures that frame our analysis and vision are intimately bound up with our social and analytical practices. As economists, our mental maps and our modelling practices are mutually reinforcing. As regulators, our ways of looking at problems and the data we use are embedded in the shared analytical routines mandated by homogenous best practice rules and standards.

Richard’s key point was about the impact of professional networks: If these networks are dedicated to the propagation and projection of homogenous best practice, to the entrenching of common professional methods, and the coordination of a single analytical approach, then they are enablers of an analytical monoculture – a monoculture that is every bit as dangerous as agricultural reliance on a single crop strain.
The reinforcement through conference and journal?based networks of a single global set of professional and modelling practices in economics homogenises the way economists think about issues, construct data, and analyse problems. Similarly, global best practice regulations homogenise how regulators and other economic agents think as well as how they act. The result is not only high (and potentially destabilising) correlations in behaviour but also widely shared analytical blind spots.

This is not to deny the possibility of analytical or policymaking progress: we can and must learn from each other and from past mistakes. But in conditions of radical uncertainty it is impossible to know ex ante what best practice will be; and we can no longer assume that competition will ensure that good theory pushes out the bad as we converge on the one true model. As David Stark and others have argued, the ability to navigate uncertain futures comes above all from entertaining a diversity of analytical and valuation frameworks – from embracing cognitive dissonance. What is more, when dealing with a multifaceted world, we need to experiment with a variety of modelling approaches and be willing to switch cognitive spectacles to illuminate different types of problem.

Alfred Moore picked up on the point of how we understand democracy, and increase inclusion. One way is of empowerment to contest decisions. Richard agreed, but thought that the pressure for homogeneity comes from political leaders, who want to demonstrate that they are making decisions on the basis of scientific models; and too much contestation confuses this perspective.

Gary Dymski commented that the power to challenge is not equivalent to “too much democracy”. He also went back to the idea of economists being based in different disciplines; these, he felt, would have different institutional linkages and would struggle to connect back to colleagues in standard economics department. A productive discussion is the “challenge conversation” when a heterodox person is at the same level in the same department as orthodox people. Communication then arises from mutual respect. Richard said that the Bank of England – sometimes dubbed the “University of Money” – has to deal with practical questions, and has often been more diverse than has been widely believed. There is also considerable variety of economic thought within the LSE; it’s possible from the outside to see monocultures which perhaps don’t really exist.

Marcus Miller picked up on the idea of “radical uncertainty”, and the role of shocks in reshaping models. He thought that LSE has a history of monoculture, and of reverting to the DSGE model. Richard agreed that this might be true of the Economics department at LSE, but that there are definitely other opinions within the University as a whole. On uncertainty, his view is that most economists still think of this in terms of knowledge problems affecting rational actors and so limiting their knowledge of what is ‘out there’ rather than in terms of radical indeterminacy at the level of social reality itself thanks to innovation and novelty; economists want to present themselves as custodians of a predictive science, so that any information problems have to be bolted on to existing models as systematic biases.
Maeve noted that bulk of economic practitioners tend to be white males based in the City of London; and that this lack of variety leads to problems in predicting wider realities (Brexit being the prime example). Richard agreed that economics is quite male and white, largely because mathematics is quite male and white; but he thought that the real problem is the absorption of utilitarian approaches into the mainstream, which excludes the role of non-monetary value judgements. Politics, in contrast, should be about making difficult decisions about value trade-offs, which is a different kind of conceptual language to that of economics.

5) Closing reflections on the afternoon

David Tuckett stressed the need for this project to keep focused on Macroeconomics, and avoid the easy temptation of moving into other areas of economics. We also need to focus on public understanding, which is a very difficult area in which to engage. The main question is about how the whole macroeconomic system aggregates and co-ordinates, and whether we can produce something new about this. The way things co-ordinate in standard economics is via the price mechanism; in this model, people relate to each other through prices, and not through psychology, sociology, and so on. If anyone here has ideas about how people relate to each other which would be worth studying, we would be grateful to hear them.

He also asked how we can influence the macroeconomic system so that other ways of thinking are heard, and, if they are valid, are absorbed into that system. Can we make macroeconomics more diverse? The fact of diversity means that a single economic model does not feel right, and the promotion of diversity must be important. We need to understand the forces that are inhibiting diversity; these are more complex than just the restrictions of the five top journals.

The present academic system has a problem is feedback. Evolution is a product of feedback; the question is how feedback is created and used is thus important. Economists are perhaps not involved in university decisions shaping academic environments as much as they should be; and they are not regarded as “scientists” to the extent which they might want. If economic models contain assumptions about human behaviour which are simply wrong, then there is evidently something wrong with those models.

Laura Bear suggested four areas of research under this heading. One would be on academic institutions themselves: the financial structures could be examined, and the constraints that are involved. The ways in which academic models travel into policy-making situations could also be researched; as could syllabuses, and gender inequality in promotion and salaries.

We need to investigate the linkages between the academic study of economics and the “black boxes” of economic institutions. The final area is thinking about the “public good” of Economics in a different way, and what would be a more democratic version of this concept.