Wednesday, November 4, 2015

Two Fed Economists Admit Crisis in Empirical Economics

A. J. Van Slyke emails:

I thought you might enjoy this article that has so far flown under the radar. Two FED economists have proven that empirical studies in Economics are nearly useless since they can not be scientifically replicated. Unfortunately, it doesn't lead them to the conclusion that the Austrians are correct. 


  1. Who reached this conclusion first? Was it Mises? Or Bohm-Bawerk or Menger? Either way, they're about 100 years late to the party.

    1. Based on their proposed solutions they clearly need to research the replication process itself. Their solutions are primarily that the replicators be provided the exact data sets used by the original author. This might allow them to replicate the study but would have no relevance to the current real world. I agree they are "about 100 years late to the party." And it doesn't appear they are any closer to recognizing their methodological errors.

  2. Do you really expect Ptolemy to come right out and admit that the Earth isn't the center of the universe?

  3. Empiricism is OK when the data are clearly quantifiable. When they aren't, or when you need instrumental variables / proxy measurements, you have to make assumptions in order to quantify them or to relate them to the variable you're attempting to measure. Sure enough, assumptions can and often are wrong. One of the biggest problem in economics is the measurement problem.