Archive for February, 2013

Mathematician David Orrell writes in a new book that scientific truths may not always be “beautiful” and “elegant” theories:

It is easier to claim a theory is beautiful than to show that it actually works, or makes sense.

As further described by Christopher Shea in the article:

He [Orrell] points to modern physics, in particular, as especially prone to develop ever-more-elaborate models whose goals have more to do with elegance or beauty for beauty’s sake than anything else.

“Historically, there was this give and take between mathematical beauty and scientific productivity,” Orrell said in a recent interview. But in physics, “if you look in recent decades, it’s as if the aesthetics has taken over. Theory hasn’t had the input from data to put it on the right path.”

If even modern physics suffers from this “perfect-model syndrome” of forsaking truth and usefulness in the quest for beauty, what hope do we have for modern economics?


Read Full Post »

ND Expert on the SOTU

One of Notre Dame’s most hyped economics hires offers some critical opinions on Obama’s the State of the Union, though his remarks really sound more like something one would hear on a conservative talk show aiming to bolster the narrative about the need to shrink government:

As for fiscal solvency, the current budgetary policy is simply not sustainable, primarily because of the rapid growth in entitlement spending. If something is unsustainable, we know that it is going to stop. What is unclear is how it will stop…

Everyone knows that there must be significant budgetary changes to ensure long-run solvency, but the unwillingness to deal with this leads to heightened uncertainty. It may even be the case that this policy uncertainty is one reason that job growth has been so anemic.

The other gem is regarding establishing a living wage:

“It is contrary to all economic logic to suggest that higher minimum wages will lead to increased employment,” according to Fuerst.

Research on minimum wages and employment remain inconclusive, but anyway this quip really misses the point from the speech: many Americans feel that it is not right for employers to hire workers and pay less than a living wage. Though true that in competitive markets employers may not be free to pay a living wage, that is exactly the role of the legal intervention requiring it. The inability of some economists to admit that free markets do not always work well is really astounding.

What a wonderful new economics department that Notre Dame has constructed!

Read Full Post »