The Best Economics Papers Ever?

Photo: Cliff

In celebration of its 100-year anniversary, the American Economic Review asked six “eminent economists” (Kenneth J. Arrow, B. Douglas Bernheim, Martin S. Feldstein, Daniel L. McFadden, James M. Poterba, and Robert M. Solow) to select the journal’s top 20 papers ever published. On the list: Simon Kuznets‘s 1955 paper on inequality, the 1928 paper laying out the Cobb-Douglas function, Arrow’s paper on the market for medical care, and Stephen Ross‘s 1973 paper on the principal-agent problem with moral hazard. The author of an Economist article on the top 20 also offers up 11 things he learned while writing about the top 20 papers. One good example: “Paul Douglas of Cobb-Douglas fame was a remarkable man. (A Quaker, he nonetheless joined the Marines at the age of 50, earning two purple hearts, before serving three terms as Martin Luther King Jr‘s favourite senator. Most memorable, however, were his prewar tussles with his fellow Chicago aldermen, ‘the smartest bunch of bastards I ever saw grouped together’).”

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  1. Ian Kemmish says:

    It doesn’t qualify for the list because of the requirement about publication, but “The Economic Consequences of the Peace” is pretty hard to beat. Quite apart from predicting World War II, the thumbnail sketches of the British, French and US leaders at Versailles show that there really is nothing new under the sun.

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  2. Eric M. Jones says:

    I worry about the selection criteria. There is the distinct possibility of too-chummy-speaks-our-language bias. I am reminded of Feynman’s tale of the Young’s 1937 rat study that is rarely cited or spoken of (from Cargo Cult Science, Richard Feynman), because it would have called into question all other rodent-in-a-maze psychological studies.

    and:

    1) Maybe economics is all bogus, like phrenology, homeopathy, astrology, Freud, Lysenkoism, Velikovsky, etc. Perhaps this collection is like the 20 greatest papers on personal magnetism.

    2) Maybe economics is not comprehensible in any ordinary sense.

    3) Maybe the really important papers are really unfriendly and difficult to read. The winner are merely clever.

    4) Maybe the really important paper was never translated from Chinese or Linear-B….

    “The Best Lists”, are always a matter of argument and opinion.

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  3. Kristen says:

    I think it’s ironic that there were no women chosen in this panel, and yet one of the articles chosen was regarding inequality. This country is still living in the dark ages.

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    • Sally says:

      Maybe no women made the list because no women have a written an economic article worthy of the list. Can you cite one?

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  4. Chad says:

    So you accuse the panel of sexism, Kristen? Which brilliant paper by female economists was left out…

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  5. Joshua Northey says:

    1) Maybe economics is all bogus, like phrenology, homeopathy, astrology, Freud, Lysenkoism, Velikovsky, etc. Perhaps this collection is like the 20 greatest papers on personal magnetism.

    This isn’t true at all, economics is just in the period of “ether” and “phlogiston” and bleedings. Where the practitioners know just enough “something in the blood is hurting their body” to be dangerous “I know lets take the blood out of them”.

    Sometimes it does veer into being the propaganda arm of the financial services industry, but mostly it is still just very primitive.

    Mostly it suffers from measurement bias. Economists are like Pro-football scouts. Scouts notoriously fall in love with players who have big arms and fast times because those are things they can measure. They cannot measure other traits as easily so they drastically undervalue them. Similarly economists can measure total transaction value and things like that somewhat well, but are horrible at measuring actual utility.

    Sadly politicians are typically “the slaves of defunct economists”. So right now we have an economy geared towards maximizing all these measurables while it does a pretty poor job of maximizing utility.

    For example if everyone decided to that taking walks was preferable to watching TV (I know not realistic, but at least possible), and stopped overspending and lived within their means (more realistic and possible if we regulate personal credit tightly) people would be much better off despite GDP, and other measurables tanking like crazy.

    Economists love people like my friend who pays off his car, tells me how great he feels without all that financial pressure and is super happy for a month. Then he sees some ads and is told he can get some credit and purchases a new car. This makes him feel great for 2 weeks. But soon it is just a car again, and then he is stuck with 4.96 years of renewed financial stress with a car he enjoys no more than his last one. What a great economic success story! More total stuff was consumed! Joy! Apparently it doesn’t matter that from his perspective it was mal-investment.

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  6. QCIC says:

    3- And think of the gall of people not to nominate any men in the category of the century’s best crocheters!

    Sometimes you “inequality theorists” need to be a little more attuned to reality. I come from a pretty liberal background, went to liberal schools, have liberal friends, and most of them are highly educated men and women.

    Generally the women are VASTLY less interested in economics. Granted this is generalizing only over a hundred or so people. But the sample is also pretty homogeneous, many of both sexes are interested in many of the same things (which is why we are all friends).

    Now that is just an anecdote from one person, but I bet if you asked most people their experience would be similar.

    I know this radical hypothesis that men and women in some cases are generally interested in different things is hard for you to understand, but if you look around you and examine the world you may see evidence of it!

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  7. Kristen says:

    Chad – the panel that was chosen to select the papers was entirely men. This is 2011.

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  8. Dom says:

    I think the listing says some interesting things about the panels perspective (and possibly the actual) history of economics given the distribution of when the papers were published:

    Decade Articles
    1920 0
    1930 1
    1940 0
    1950 1
    1960 2
    1970 5
    1980 8
    1990 3
    2000 0
    2010 0

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