Month: December 2014
That is the title of a new paper (pdf) by Marion Fourcade, Etienne Ollion, and Yann Algan, here is the abstract:
In this essay, we investigate the dominant position of economics within the network of the social sciences in the United States. We begin by documenting the relative insularity of economics, using bibliometric data. Next we analyze the tight management of the field from the top down, which gives economics its characteristic hierarchical structure. Economists also distinguish themselves from other social scientists through their much better material situation (many teach in business schools, have external consulting activities), their more individualist worldviews, and in the confidence they have in their discipline’s ability to fix the world’s problems. Taken together, these traits constitute what we call the superiority of economists, where economists’ objective supremacy is intimately linked with their subjective sense of authority and entitlement. While this superiority has certainly fueled economists’ practical involvement and their considerable influence over the economy, it has also exposed them to more conflicts of interest, political critique, even derision.
The paper has interesting bits throughout, such as:
…the top five sociology departments now [total] 35.4 percent in the American Journal of Sociology, but 45.4 percent in the Journal of Political Economy, and a sky-high 57.6 percent in the Quarterly Journal of Economics.
The section on the rise of finance starts on p.18, worth a read. And here Paul Krugman adds extensive and very interesting comments. My view is that economists are in fact the smartest of the social scientists (on average), but this also has led economics to degenerate somewhat into a game of signaling smarts, to the detriment of breadth and knowledge of facts about the world.
From an interesting 2003 review article by Jones, Leiby, and Paik (pdf):
The energy economics literature has noted the asymmetric responses of petroleum product prices to price changes for well over a decade, as observed by Balke, Brown, and Yücel (1998) in a review of previous studies. Product prices rise more quickly in response to crude price increases than they decline in response to crude price reductions. Using weekly data on crude prices and a variety of spot and whole gasoline prices, BBY (1998) find considerable support for asymmetry in the time pattern of downstream price changes to changes in upstream prices, although they find that different specifications of asymmetry yield different results.
Applied to the crude-product relationship, asymmetry has a different meaning than it does in the oil price-GDP relationship. In the crude-product relationship, the asymmetry is in the speed of the response, while in the oil price-GDP relationship, it is in the magnitude of the response. Competition will ensure that the magnitudes of the response of product prices to crude price changes are eventually equal. Otherwise profits in refining and distribution would grow without bound.
Here is a JSTOR link to a somewhat later Balke, Brown, and Yücel paper. Here is their 2008 paper (pdf) on why the oil price/gdp link has weakened in the United States. Here is a related 2010 paper (pdf). Here is a recent James Hamilton blog post on oil gluts. Here is Scott: “Focus on Q, not P.”