Even MIT economists are admitting the obvious. (pdf) Chances the profession will heal itself? I don’t see it as long as the cash and the work keeps rolling in from the Federal Reserve, the NSF, the Federal bureaucracy, and from government supported students — and as long as the elite in the profession continue to control who gets to publish in the profession’s guild-run publications and who gets tenure at the top 10 or 15 graduate schools.
Sadly, it’s hard to see any changes coming no matter how badly the economists crash the economy. The incentives that matter to the economists are the cash and the jobs and the publications and the prestige and the power — what happens to the rest of us when the economy train wrecks is a personal matter effecting nearly everyone else, but not any of them — the macroeconomists are not losing their jobs or income or positions of power any time soon, or, likely, ever. And it looks to me like skill at the current preferred math — and the publications made possible by endless variations on that math — will continue to be used as the criterion of “science” for the profession — simply because this criterion of “science” is the criterion which best aligns with the profession interests and training of the elite which controls the stamp of “science” — and the stamp of “published” and “tenure” — within the profession.
Mark Thoma has some selections from Ricardo Caballeros paper, for those without the time to read the whole thing.