Yesterday I attended the Centre for Science and Policy Annual Conference 2015. There were a range of different discussions about how government can make better use of expertise and evidence from the humanities. When discussion the issue of improving communication of useful insights, a question was raised how it came that economists could get away with being so useless.
The answer provided by Barry Eichengreen was that there are no incentives to change to be more useful. This is the usual answer you get from economists when the question is asked. But I would like to provide a more nuanced answer in this blog. First of all it is true that economists have a reputation for being useless, but this does not imply that all economists are useless, or that all economic research is useless. It merely implies that a sufficient number of students have had the experience of being taught economics by lecturers and professors who made no attempt to make a real world connection. However, there is quite a number of economists who do make the connection and illustrate how economic principles can help us understand what is happening in the real world, as well as how we can design more effective policies.
There are some problems with teaching and research in economics, but there are some very insightful economists out there who take their role to be useful to society seriously and who also endow their students with a better understanding of how the real economy works. So not making the connection and explaining to a student what the point of the model is in a real world context, tells you more about that particular professor than it tells you about the extent to which economics as a discipline can be a useful tool.
Models are useful tools for making a particular point clear, and it is our job when teaching to make the applicability as well as the limited applicability of the models clear to the students, and in our research to continuously improve these tools to enhance their applicability to the real world.