How will the financial crisis affect the economics profession?
Paul, a loyal MR reader, asks:
What will be the impacts of the current situation for economics and economists. It seems clear that we have screwed up. We don’t even have the excuse that we understood what was going on but no one listened to us; economists have been in powerful positions for a long time, and it is generally agreed that Ben Bernanke is both a powerful and a well respected economist. Will demand for economics courses fall? (It seems obvious that demand for finance courses and so for finance professors will decline.) I am not teaching this semester, but I would like to know from those who are: What do you tell students when they ask what economics had to say about the current mess? It seems to me that this situation will have profound implications for economics as a scientific and also as an academic discipline and I would like to see a discussion. Your blog is probably an ideal place for such a discussion.
I believe that demand for economics classes will rise, as it often does in economically troubled times. Some of this will be "shaman demand" rather than "knowledge demand." The consulting incomes of finance economists will fall and fewer talented people will go into finance. Speaking fees will fall since fewer economists will give talks at hedge funds. The relative status of macroeconomists will rise and the relative status of microeconomists will fall. Economists will gain in fame and lose in income. What do you think?