“The Closed Marketplace of Economic Ideas,” a Rebuttal

In a Project Syndicate column, Federico Fubini makes the argument that the intellectual leaders in economics from ten years ago are still the leaders of today, and this despite the fact that we have had a financial crisis that was not predicted by the profession. I do not agree with this column on several fronts. As the argument was made using RePEc data, I feel obligated to set the record straight.

One may discuss whether the economics profession has really not seen the crisis coming. But even if this crisis was unforeseen, it is wrong to argue on principle that the best economists from ten years ago should not be considered to be the best today. Indeed, it is not the case that the whole profession is focussed on predicting financial or economic crises. Economics has much more to offer, just see the list of recent Nobel Prize winners or the large variety of fields covered by NEP, RePEc’s research alert service. Most of those fields have nothing to do with crises. For example, the leaders in auction theory from ten years ago are likely to be leaders now, the same applies to development economics, empirical labor economics, or environmental economics. Ten years is short in the evolution of scientists.

But beyond this mischaracterization of what the economics profession does, there is the issue with the use of the data to prove the point. Fubini uses the ranking of economists provided by IDEAS/RePEc, taking the December 2006 and the September 2015 rankings. But before looking at them, one has to understand what they measure. They are an aggregation of 23 (2006) or 35 (2015) criteria, almost all of which pertain to the lifetime output of the economists. Those that are not are four looking at readership statistics for the last months, and in the recent rankings six criteria discounting citations by their age. Basically, the accumulated research and citations that were considered in 2006 are also considered in 2015. There is obviously going to be high persistence among the best economists. And keep in mind that critiquing someone will earn him a citation.

What you want to do is using two datasets that do not overlap, one that considers publications until 2006, and one since that year. One can get very close by using another ranking, the one that considers only the publications from the last 10 years. In the following I will use the one that was published today and pertains to December 2015. We have thus only one year of overlap in the publication dates. And the results look quite different (I did this in a couple of hours, I cannot vouch the numbers are totally correct).

Incumbency rate by cohort
Cohort Fubini Better
Top 10 90% 70%
Top 20 95% 75%
Top 50 98% 72%
Top 100 94% 61%
Top 200 65% 42%

The rest of the arguments in the Fubini column also change quite a bit once you look at better data.

You must not be an economist. In fact, Lucas and Fama both moved up in the RePEc rankings during the period I examined, from 30 to nine and from 23 to 17, respectively. And the persistence at the top is striking across the board. Among the top ten economists in September 2015, six were already there in December 2006, and another two were ranked 11 and 13.

Lucas (Robert E. Jr.) and Fama actually dropped, Lucas from 30 to 33, Fama from 23 to … not being ranked in the top 10%. And in the top ten for December 2015, only three where there in 2006, another two ranked 11 and 13 in 2006 (the same).

Mobility in the RePEc rankings remains subdued even after widening the sample. For example, of the top 100 economists in September 2015, only 14 were absent from the much wider top 5% in 2006, and only two others had advanced more than 200 spots over the previous decade. Among those recently ranked from 101 to 200, just 24 were not in the top 5% in 2006, and only ten others had moved up by more than 200 places. The rate of renewal among the 200 most influential economists was as low as 25% – and just 16% among the top 100 – during a decade in which the explanatory power of prevailing economic theory had been found severely wanting.

Again with better data, this looks different. From the 2015 top 100, 41 were absent from the top 5% in 2006. Nine advanced more than 200 spots. For 101 to 200, 45 were not in the top 5%, and seven moved up more than 200 spots. Using Fubini’s definitions, the renewal rate is thus 51% in the top 200 and 50% in the top 100. Hardly a stagnation.

In the rankings of economists, by contrast, criteria such as gender or geographic origin confirm the overall inertia. Only four women made the RePEc top 200 in September 2015, compared to three in December 2006, and two were included on both lists. Likewise, emerging countries – which represent more than 90% of the world’s population, three-quarters of global GDP growth over the last decade, and nearly half of total income in current dollar terms – supplied just 11 of the top 200 economists in September 2015, up from ten in December 2006. And ten of those 11 – three Iranians, four Indians, two Turks, and one Chinese – have lived and worked in the US or the United Kingdom since their student days.

With better data, this changes as well. There are now seven women. Still too few, though. There are 18 economists from emerging countries: two Turks, one Egyptian, seven Indians, two Iranians, two Pakistani, one from Cameroun, two Chinese, one Bangladeshi. Eight of them live in an emerging economy.

I’ll let the reader judge whether there is still a “closed market place for ideas in economics.” But the picture certainly looks different from what Fubini seems to imply.

3 Responses to “The Closed Marketplace of Economic Ideas,” a Rebuttal

  1. Thanks for the attention and the post.

    However, let me make a few points.

    1. What you describe as “Fubini” data are simply the data I collect on the RePEc/Ideas website, both for 2006 and 2015. Therefore, if that data should be corrected with “better” data, that applies to the RePEc ranking in the first place. Not to “Fubini” data. I have not made it up or massaged in any way. I have just used the material made available on your website.

    2. Please note that I have used the data that is made available, on the basis of the info on it that is made available. And that info does specify on your website that the data is already discounted by citation age. That “aging factor”, if I can call it this way, applies both to 2006 and 2015. Therefore, based on all available data and info, there is no reason to think the rankings are not comparable. RePEc/Ideas claims they are already discounted by citation age, and you certainly confirm that they are over the last decade.

    3. I have some doubts about the comparison between 2006 and 2015 the way you do it. On the one hand you have a series from a precise point in time (2006) back to infinity with no “raging factor”. On the other hand you have a finite series spanning a decade (2015-2006) with an “aging factor”. This sounds to me rather like matching two radically different concepts. So I doubt this kind of (new) presentation, that we didn’t now about previously, is really “better” or, rather, useful for the purpose at hand.

    4. Just one word on what your describe as my “mischaracterization”. You certainly know better than most of us about what economics does. And I do recognise that many of the economists on the list have made tremendous contributions and of course ideas do change slowly. My point is different, however – it is not a matter of how good people were at predicting the inflection point of a crisis, but how hindered were some of them at reading the underlying imbalances, as they were misled by theory (REH, perfectly self-regulating markets, and the like). This stays with us and remains relevant today.

    5. After all, your findings about the top 10, 20, 50, and 100 slots do confirm stickiness at the top and lack of geographic/gender balance, if somewhat less dramatically. We can argue on this and I am sure much else can be said one way or another. But I feel the main points (persistence, lack of geographical and gender dispersion) will stay with us anyway.

    Federico Fubini

  2. Just to clear up a few points, in case I was not clear in the initial post.

    1. Whether the RePEc ranking data is good or bad is not for me to judge. But they are a lot of different rankings, and they differ in their purposes and uses. My point is that you did not choose the right ones, and I suggest better ones in my blog post.
    2. The citation discounting applies only for a few ranking criteria, and only for the 2015 ranking. The rankings are thus not completely comparable. However, this is not my main argument. It is that you should choose rankings based on publication periods that do not overlap.
    3. Yes, these are different rankings. Yes, this is the point! See above.
    4. Re-read my original argument. The majority of economists has nothing to do with rational expectations, self-regulating markets and the like. Why do accuse them of missing the crisis and why are you calling for them to be ignored by other economists? And besides, assume there is a debate about the theoretical stands you are condemning. Would you not assume that this would generate citations for those economists you are criticizing? That would be especially the case with the rankings that you used, as they capture old literature as well.
    5. I would not go that far. What number do you think would represent acceptable stickiness, geographic balance, or gender balance? Unless you define appropriately such metrics against a recognized standard, you cannot argue that they are too high or too low.

  3. What Federico Fubini is pointing to is indeed a more serious problem, which cannot be turned into a debate on the quality of the rankings used by Repec.

    The core issue is about the quality of economics. I hold the view that economists, in general, must accept the blame for wobbly state of the global economy. Economists have by and large become handmaids of politicians, business tycoons, money managers and speculators. If economies are not doing well, economists must be humble enough to admit that there must be something wrong with the economics that they teach and preach

    There is hardly any out of the box thinking in economics because, economic science remains cocooned inside warring schools of thought. I do not think that there has been any positive value addition to the fundamental science of economics in recent times. Even the Nobel Prize Committee, which has been attempting promote economic science does not seem to understand the difference between the fundamental science of economics and the applied science of econometrics.

    In my opinion, the whole of economics needs to be rewritten since whatever that exists now in the name of economics is a highly corrupted science, – corrupted by political and theological ideologies. We would need to free the fundamental science of economics first from the overwhelming influence of politics and money. There is hardly any economist today who is willing to treat monetary economics as an applied science. In my view, anyone who cannot see the reason behind this distinction does not understand real economics.

    There are any number of reasons, which I can cite that demand a complete overhaul of the fundamental science of economics and indeed as Fubini has observed economics has become closed market for new ideas. There is no economist or school of thought, which is willing to address the legitimate challenges raised against them. They are happy hiding behind their professorial chairs and sheep like followers.

    I am giving below links to some of the fundamental criticisms that I have leveled against contemporary economics. Would there be anyone to address my concerns logically (I mean without relying on quoting one economist after another).

    A science should stand on the strength of its own concepts and theories and not the names of a few individuals.

    https://www.linkedin.com/pulse/economics-vs-econometrics-nobel-prizes-going-wrong-persons-m-a-j?

    https://www.linkedin.com/today/post/article/how-competition-kills-economics-jeyaseelan-m-a-j?

    https://www.linkedin.com/pulse/20140704155020-17589031-is-it-time-for-de-linking-economics-from-politics?

    https://www.linkedin.com/pulse/20140718210034-17589031-healthy-vs-unhealthy-economic-growth?

    https://www.linkedin.com/pulse/20140803081946-17589031-urgent-need-to-liberate-economics-from-the-two-dimensional-trap?

    https://www.linkedin.com/pulse/20140813082306-17589031-is-inflation-the-process-by-which-rich-get-richer?

    https://www.linkedin.com/pulse/20141115174340-17589031-the-meaninglessness-of-market-economics?
    https://www.linkedin.com/pulse/root-causes-inequality-jeyaseelan-m-a-j?

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