Is economics really a science?

The blog Real Clear Markets doesn’t think so.

The most authoritative macroeconomic theories are those advanced by Nobel Prize Winners in Economic Science, to use the official title of the prize. The Economics Nobel Prize is awarded at the same time as the Nobel Prize in Physics, Chemistry, and Medicine, the three hard sciences. The implication is that macroeconomics has the same predictive power as the theories of physics, chemistry, and molecular biology. Indeed, we should judge the validity of macroeconomic theories in the same way we judge the theories of the hard sciences. If anything, we should demand even more rigor and reliability from macroeconomics, because it is far more important than any hard science. The failure of macroeconomic actions in the Great Depression led to World War II, in which many millions were killed, to say nothing of the vast misery caused by the Depression itself.

Years ago, I had a dispute on the comparative rigor of astronomy and macroeconomics with Harvard economist H. Gregory Mankiw, who from 2003 to 2005 was Chair of President Bush’s Council of Economic Advisors. Mankiw admitted that the predictive power of modern macroeconomic theory was abysmal. But he argued that astronomy was no better in the late sixteenth century, when astronomers were debating whether it was Ptolemy or Copernicus who was correct.

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