Flexibility and Realism: The Nine Approaches to Make Economists More Useful to the World
Author Soumaya Keynes published an article in the Financial Times on April 26th titled “How Can Economists Increase the Practical Usefulness of Their Research?” She began by saying, “I’m not about to claim that economists are useless,” and “nor will I argue that all economists must be obviously useful.”
However, she went on to note that the practical benefit of academic economists’ research has become limited today, considering several factors she outlines:
Aligning More with Decision-Makers: While research pushes the boundaries of knowledge, there is a gap between the academic research that should be relevant to public policy and what decision-makers actually want. Keynes explains that academia allows for tackling a single issue with an ideal tool, whereas public policy typically deals with multiple distortions using limited legal tools. She adds that quantitatively measuring the impact of policy changes is always practically beneficial.
Asking the Right Research Questions: The main challenge is that researchers often ask the wrong questions and present poor answers. This happens because academia rewards innovation, not “usefulness.” Keynes points out that academia encourages precise questions rather than choosing broader ones, which are sometimes more beneficial.
Providing Realistic Answers: Keynes notes that economists sometimes offer incomplete answers to economic issues. For example, economists have spent years estimating the social cost of carbon emissions, claiming that carbon taxes are the best way to combat climate change. Yet, the Biden administration struggled to find fair criteria for distributing subsidies to companies to incentivize them to reduce carbon emissions, indicating that economists failed to provide clear solutions to this problem. Citing economist Betsey Stevenson from the University of Michigan, she says: “Economists don’t know what to do when they think something is a bad idea!”
Using Real-Time Data: To have a more practical impact, Keynes argues that economists should rely on real-time data available from some market-operating companies.
Comparing Results from Economic Literature: Keynes suggests that summarizing and comparing results from economic literature could save policymakers from wading through piles of research papers. She mentions initiatives like one led by Eva Vivalt from the University of Toronto, which aims to develop standards for easy comparison of economic studies. One of Vivalt’s findings, after reviewing more than 600 development economics studies, was that less than 10% addressed the costs of economic policies—a focus for decision-makers.
Rewarding Connections Between Researchers and Policymakers: Keynes points out that economists are usually not rewarded if their research is cited by a government or regulatory body. However, some efforts have emerged recently, such as work by a research group including Joby Shah Goda from the Stanford Institute for Economic Policy Research, which aims to create a metric supporting such citations, potentially alongside academic ones.
Fluid Movement Between Academia and Practice: Researchers value pathways that allow for easy and flexible movement between government work and academia, which is currently lacking. In the UK, for example, returning to academia after working in a practical role can be challenging. Martha Gimbel, who recently worked at the White House Council of Economic Advisers, notes that such work experience can harm academic promotion prospects.
Writing Catchy Titles: Keynes advocates for economists to write clearer, more engaging titles. She says, “You don’t need to write headlines like ’10 Shocking Consequences of High Interest Rates… You Won’t Believe Number 5,’ but titles should reflect the questions or findings.” Keynes adds that less than 15% of the titles of working papers from the U.S. National Bureau of Economic Research include question marks.
Making Papers Easier to Read: Keynes stresses the importance of writing papers in clear and simple language, noting that papers with higher readability scores in their abstracts receive more citations.
Keynes concludes by acknowledging the clear differences between writing for newspapers and research centers, but emphasizes that economists must recognize that their “customers” struggle to understand their research.
Source: Soumaya, K. (2024, April 26). How economists could make themselves more useful. Financial Times. https://www.ft.com/content/0f458670-417c-4aef-ae05-11a003fa48db
