Word reaches my desk this afternoon of an interesting-looking new book on the horizon, called “The Foundations of Positive and Normative Economics“, an essay collection edited by Andrew Caplin (of the monkey brains) and Andrew Schotter. Details are a bit sketchy, but the idea is just fine with me. I have a high tolerance for this kind of thing, and hopefully it lives up to my expectations.
On that note, I hope for something a bit different to the endorsement quotes on the book’s rather empty webpage:
“Are you puzzled by the implications of behavioral economics? Are we in the throes of a paradigm shift? Is neoclassical economics refuted? Economic methodology has never been more disputed. If you want to be part of the debate, this book is the place to start.”–Ken Binmore, University College London
I still don’t see this distinction between ‘behavioral economics’ and ‘neoclassical economics’, to be honest (see here, for example). Why is a different model of people an abandonment of neoclassical economics? ‘People maximize stuff’ is my minimalist description of neoclassical economics, and the behavioral set is just trying to figure out what the stuff is. Again (again, again), since it’s not possible to test rationality, the ‘maximize’ bit just has to float out there unattached.
I don’t really get this one either:
“Should economics take account of neuro-physiological data? Can subjective states of mind play a useful role in economic analysis? These and other provocative questions are examined and debated in this fascinating volume of essays from some of the deepest thinkers in contemporary economics.”–Eric Maskin, Nobel Laureate in Economics, Institute for Advanced Study
Maybe I’m behind the curve on this one, but I’m not sure what that really means. It gives the impression that this book might be predominantly concerned with the implications of psychological and neurological research, but to me all that is really something different from the epistemological question of what positive and normative economics are doing for us, where they came from and where they’re going. The state-of-the-art in economic theory or modeling is one thing, but I hope the book tackles the big questions rather than obsessing about the value of behavioral evidence.
I disagree fundamentally that “economic methodology has never been more disputed”, hence the futility of chipping away at the tiny and ultimately boring debates at the root of modern research. The assumptions, the beliefs can surely differ, but I think the approach is set on some fundamental level. Superficial differences in approach do not go down very far: yes, a ‘behavioral economist’ might be searching for realism by figuring out how people act, and an ’empirical economist’ is running regressions on cleverly constructed data, a ‘theorist’ is off in the land of abstraction and algebra, but all are operating on the same field of positive economic science. The real question is how we got to be that way, not why some economists do one thing and some another. That’s the question of the foundations of positive and normative economics.