Macroeconomics: Science or Not?
After reading both articles about macroeconomics and whether it is a science or not, I am intrigued by both writers’ ideas. In the article, “What is economics good for?” by Rosenberg and Curtain, they discuss that economics should not be considered a science but instead a craft, saying that “the Chairman of the Federal Reserve must, like a first violinist tuning the orchestra, have the rare ear to fine-tune complexity (Rosenberg and Curtain, 1).” By saying this they are implying that in order to have a strong grasp on economics and know what you are doing, you must step away from the hard math and instead use wisdom and a strong, “gut feeling.”
In the second article titled, “The Real Trouble with Economics,” written by economist Paul Krugman, he argues against Rosenberg and Curtain stating that they have missed some important facts about how recent crisis were handled and that economics is in fact a science. In the ...view middle of the document...
If I were in office when the crisis hit, I would have used Krugman’s idea that macroeconomics is a science, by using the AD/AS model. By looking at the model I would be able to see which way the demand curve needed to be shift and based off that, which policy, contractionary or expansionary, to put in place. The AD/AS model does not tell the exact remedies that are needed in order to perfectly adjust the economy but similar to other sciences, it is a model that can lead you in the right direction, and that is where personal knowledge and intuition steps in.
After reading both articles, I believe that the financial crisis in 2008 was more of a political crisis rather than an economic one. My reasoning for this is that the leaders in the financial sector created an idea that they could create paper assets whose value would be determined by housing prices, and believed that housing prices would continue to rise without a hiccup. Without using models or data collected, this method backfired completely on the economy and leads me to think that the leaders of the financial system, who were key word, elected, created this idea without the use of economics as a science. Austerity policies are so popular because they are ways for government to get what they want. If the models were closely accessed and further looked at, it would show that these policies are not in the best interest of the economy or population as a whole.
So to answer the main question of whether macroeconomics is a science, I return to Krugman’s article and agree that, macroeconomics is indeed a science. I can support this by comparing macroeconomics to astronomy. Both sciences have a large set of data, going back decades, even centuries, and models conducted through that data. Macroeconomics has politics however, people thinking they are right no matter what the data holds, and that is what mixes up the two sciences. Macroeconomics as a whole, no matter the politics, is critical to the welfare of society and is a science.
Krugman, Paul. "The Real Trouble With Economics." The New York TImes. The New York Times Company, 27 Aug. 2013. Web. 4 Nov. 2014.
Rosenberg, Alex, and Tyler Curtain. "What Is Economics Good For?" The New York Times. The New York Times Company, 24 Aug. 2013. Web. 4 Nov. 2014.