Q&A: Paul Romer on ‘Mathiness’ and the State of Economics
By Anna Louise Sussman (Original source WSJ)
“A Democratic U.S. presidential candidate has pledged to grow the economy by spending hundreds of billions of dollars on college education and eliminating tax deductions for the wealthy. A Republican promises to bring the growth rate to 4% a year by cutting taxes and reducing government regulations. How do we know what might work?
For all of its importance, economists still disagree on what policies and measures are sure to bring economic growth. Those on the left often argue for more government investment and spending to stimulate the economy. Those on the right often advocate for less regulation and lower taxes. Adding to the confusion, says Paul Romer, an economics professor at New York University and an influential growth theorist, is the current polarized political climate, which he believes is seeping into the economics profession.
Earlier this year, he re-entered the intellectual fray with a paper arguing that the rise of what he calls “mathiness,” the use of mathematics to persuade or mislead rather than to clarify, was obstructing progress in our understanding of the factors and inputs that can lead to economic growth. Mathiness has hindered our ability to answer questions such as, What is the value of an idea? Or, How do we mathematically model the so-called “scale effects” that occur when a large network of people uses a similar product, such as mobile phones?”
Click here to see more