, Columnist
Data Geeks Are Taking Over Economics
Grand mathematical theories are losing out to research based on facts.
On days when the sun shines, how many happy faces fit above the curve?
Photographer: Richard Baker/In pictures ltd./corbis/getty imagesFor a few decades, economists used to imagine how the world works, write down a theory describing their idea, and call it a day. If some statisticians came along and found some support for the theory, well, great! But usually they didn’t, and that was fine too. As one old joke put it, if an idea worked in practice, economists would ask whether it worked in theory.
That began to change in the late 1980s and 1990s. As my Bloomberg View colleague Justin Fox has documented, that was when the discipline started shifting toward empirics and evidence: