Sunday, 16 July 2017

Book Review: Economic Ideas You Should Forget

Imagine you gathered together a bunch of economists, and asked each of them to write two pages about their pet hates (in economics). I imagine you would be able to put together a volume that looks very similar to a new book, "Economic Ideas You Should Forget", edited by Bruno Frey and David Iselin. It would be charitable to describe this book as anything more than an excuse for complaint by several well-known (and many lesser known) economists. The editors are up-front in the introduction that "The essays do not idolize models or references..." but it is the lack of references that make many of the essays seem at the same time both lightweight and unsupported by evidence.

To be fair, there are some excellent chapters including those by Daron Acemoglu (Capitalism), Thomas Ehrmann (Big Data Predictions Devoid of Theory), and Dider Sornette (Decisions are Deterministic). But there are some misses like Jurg Helbling (Boundedness of Rationality) and surprisingly (to me) Richard Easterlin (Economic Growth Increases People's Well-Being), which contrasts starkly with research by Betsy Stevenson and Justin Wolfers (see here). It was interesting to read Victor Ginsburgh (Contingent Valuation, Willingness to Pay, and Willingness to Accept), given that I have written on the contingent valuation debate before (see here and here), but I don't think that essay added much to the debate.

Most of the essays are unconvincing and I doubt anyone will be persuaded to change their thinking on the basis of reading two pages in this book. Overall, there were some good bits but really, this is an economics book you should forget.

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