The past few years have been tough on economics and economists. In a searing indictment written one year after the collapse of Lehman Brothers, Paul Krugman concluded that
the central cause of the profession’s failure was the desire for an all-encompassing, intellectually elegant approach that also gave economists a chance to show off their mathematical prowess. Unfortunately, this romanticized and sanitized vision of the economy led most economists to ignore all the things that can go wrong. They turned a blind eye to the limitations of human rationality…to the problems of institutions that run amok; to the imperfections of markets…and to the dangers created when regulators don’t believe in regulation.
Last August, Graeme Maxton published a book arguing that “modern economics has failed us,” and this April, the New York Times hosted a roundtable “about how the teaching of economics should change in light of the financial crisis.”
This soul-searching has led to the establishment of organizations such as the Institute for New Economic Thinking and invigorated discussions about alternative metrics for gauging countries’ welfare (last July, in fact, the UN General Assembly adopted a resolution asserting that “the gross domestic product indicator by nature was not designed to and does not adequately reflect the happiness and well-being of people in a country”).
To get the pulse of a field in flux, I asked eight of the world’s top young economists to identify the biggest unanswered questions in economics and predict what breakthroughs will define it a decade or two hence.
Read here the 8 interviews, with some of the worlds top young economists: 8TopYoungEconomists
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