The Sorry State of the Dismal Science

Since the 2008 global financial crisis, many of the assumptions underpinning long-dominant economic models have been called into question, and the credibility of the economics profession has steadily eroded. What must economists do to right their ship?

In this Big Picture, Dani Rodrik urges economists to expand the scope of empirical economic analysis beyond the profession's own self-imposed boundaries. Mohamed A. El-Erian agrees, arguing that economists desperately need to embrace a multidisciplinary approach to incorporate insights from game theory, psychology, and other fields. And Jayati Ghosh calls on economists to get back into the business of serving the public, rather than special interests. 

In a similar vein, Jim O’Neill identifies specific areas where economists must rethink assumptions that no longer seem to describe reality. And Edmund S. Phelps points to three broader areas where economists remain beholden to flawed and outdated methodological approaches.