“The point of this example: lots of errors are made—and then repeated by authors and overlooked by readers—even in the most famous writings of economists. And the errors committed in Samuelons’ Foundations certainly didn’t stop the mathematization of mainstream economics in the postwar period.”
The storm unleashed by Chris Giles’s takedown (follow the links) of Thomas Piketty for the Financial Times (with responses now by Piketty himself, Neil Irwin, Simon Wren-Lewis, Steven Pressman, and others) reminds me of two stories.
First, there’s the story of a seminar by Hollis Chenery, one of the pioneers of economy-wide development planning models, at Yale University in the early 1970s. One of the participants in the seminar, who later was one of my professors in graduate school, offered Chenery a large sum of money to put together the appropriate matrix of data—and then an even larger sum of money not to invert the matrix. The point: there are so many mistakes, assumptions, and elements of pure guesswork involved in compiling any set of economic data, it is a fundamental mistake to presume the correct economic policy or strategy can be devised—and then offered as objective…
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