Here’s heartening news for all those who believe that economists not only can’t predict the economic future, but can’t even describe the economic past. Daniel Altman, for his Economic View column for the New York Times, e-mailed the 177 members of the National Bureau of Economic Research who concentrate on economic fluctuations and growth. He asked them a seemingly simple question: “Which factor was most important for the economy’s growth from mid-2003 through the end of 2006?”
You might immediately argue, of course, that the question isn’t really that simple. Especially when you see that Altman offered only multiple-choice answers:
a. The tax cuts signed by President George W. Bush.
b. Pent-up demand following the recession, the corporate scandals and the invasion of Iraq.
c. Both (a) and (b) were important.
d. Neither (a) nor (b) was important; it was the regular business cycle.
e. There’s no way to tell now.
Altman acknowledges that his proposed answers “didn’t include anything having to do with monetary policy, including the Federal Reserve’s actions, global interest rates or the refinancing in the home loan market — factors that could have been important.”
Of the forty-nine economists who replied, five chose (a), three chose (b), three chose (c), and “the majority,” Altman wrote, “30 economists, answered neither or supplied an answer not listed.”
What follows in the article is a very interesting discussion and sampling of various views, crowned by this gem from Paul S. Willen of the Boston Fed: “[I]f we hold ourselves to the highest standards of scholarly rigor, we could not answer anything but (e).”
Altman, btw, has a new book out, which I’ve only glanced at but which seems intriguing: Connected: 24 Hours in the Global Economy.