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June 01, 2014


Simon Reynolds

"Both seem to be assuming something which I find questionable - that politicians should advise governments."

Shouldn't that be "economists" not "politicians"


Thanks Simon - correction made.

Dave Timoney

The prominence of the advice of economists in political debate is a choice made by politicians, not by economists. This is less about the Overton window and more about the instrumental use of science (or pseudo-science) to advance policy.

This was made hilariously clear recently by the self-satisfied marketing for the latest Freakonomics book. Cameron's stony silence when the dudes advocated charging for NHS services was not a mark of their iconoclasm, as they thought, but of their failure to supply what he demanded. Ironic, no?

Peter K.

Economists shouldn't advise governments because they don't listen?

Regular people will ignore economists' investment advice when they see their friends and neighbors making money off of the latest bubble.

Maybe it's me but I don't see the point of this blog post or the OP.

Economists can't foresee recessions, but some did see - in the U.S. context - that the trade deficit was a causing a lack of demand which was being filled by unsustainable housing bubble and that the bursting of the bubble would be disastrous. The Indian central banker Rajan saw that the shadow banking system was vulnerable to a bank run and was ridiculed by prominent economists for it. Economists' advice was followed somewhat after the crisis and that stabilized the situation at a subpar trajectory.

Hatford ignores all of this and focuses only on forecasting recessions.

It's hard to predict recessions because it's hard to predict what the Fed is going to do. Fed minutes showed that that the FOMC was clueless going into the crisis. At the very least economists and the Financial Times could focus on that.

Steven Hope

Dentists now advise you on your weight and alcohol consumption as the NHS takes every opportunity to have 'brief interventions'.


Dentists also advise the government. That's one reason we have flouridation and various state level dental hygiene and education programs.

I see no reason that economists shouldn't advise the government. Your argument seems to be that since economists can only advise, but not dictate to, the government, then they shouldn't bother.

Governments can always use good economic advice. When they actually take it, good things can happen. Remember, Joseph, one of the first recorded economic advisers not only forsaw the coming fat and thin years, but proposed the government to serve as the grain buyer of last resort in times of feast and the grain seller of last resort in times of famine.


There's something disingenuous about this piece.

Governments don't listen, in part, because there are plenty of economists who (for example) will contradict Schiller's advice.

Economics needs to sort it's own house out...

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