Do we need awards in Economics?

I do not like awards. They always create jealousies, and one cannot help that whenever a committee is involved, something may not have gone right. I am thus quite happy that economists give very few awards. It makes their CVs look bad compared to other scientists, but that is the price for a relative peace in the profession.



But we still have some prizes. The Nobel one, which is not really part of the Nobel family but is still attributed much prestige is always under much scrutiny. And in the end, the right people tend to win it. There have been a few controversial cases, Myrdal, Hayek, Buchanan and Ostrom come to mind as example where quite a few eyebrows were raised, but overall this award works well.



The American Economic Association gives an award that is considered to be even more difficult to get than the Nobel Prize: the Clark Medal, given to an American aged under 40. It is difficult to get because only one is awarded every year (no joint winners) and until recently it was given every second year. When comparing to the Nobel Prize, it is relevant to understand that American get a vast majority of them.



Now let us have a look at the past few year for the Clark award:

2011: Jonathan Levin, PhD MIT, Faculty at Stanford

2010: Esther Duflo, PhD MIT, Faculty at MIT

2009: Emmanuel Saez, PhD MIT, Faculty Harvard then Berkeley

2007: Susan Athey, PhD Stanford, Faculty at MIT then Stanford and Harvard

2005: Daron Acemoglu, PhD LSE, Faculty at MIT

2003: Steven Levitt, PhD MIT, Fellow at Harvard then faculty at Chicago

2001: Matthew Rabin, PhD MIT, Faculty at Berkeley

1999: Andrei Shleifer, PhD MIT, Faculty at Princeton, Chicago and Harvard



Do you see a pattern? Well I do, and others have, too. I am not saying these awardees are not bright and promising economists, but is there really no other qualifying economists that could have received it? Of course, John List comes to mind, who has no connection with MIT (or Harvard). But it actually worse than that. The award is given by a small committee, designated by the AEA. The AEA leadership is stacked with people with MIT and Harvard connections, so they also nominate their friends to the various committees, and you see the result.



It is even worse. In 2010, Ester Duflo was considered to be in the pool of strong candidates for the award. Guess who was on the awarding committee? Abhijit Banerjee, her PhD advisor, frequent co-author and colleague at MIT. In such a situation, an ethical person would decline the invitation to serve on the committee. That does not seem to have crossed the mind of Banerjee, who may be used to this cronyism.



There is another award, this time given by the European Economic Association: the Yrjö Jahnsson Award, to an European economist under age 45. It is given every two years, but can have several recipients. This awards has looked much cleaner because the committees and awardees have been distributed all over Europe. Europeans are indeed very sensitive to this. The last one was a shocker, though. Armin Falk won it to the surprise of many. And guess who chaired the awarding committee? His advisor, Ernst Fehr. Again, ethics would have indicated that if Falk had a chance of winning it, Fehr should have recused himself not just from chairing the committee, but from participating in it. In retrospect, this is not Fehr's first wrongdoing: two years earlier he was also on the committee when Fabrizio Zilibotti co-won the award. Zilibotti is a colleague of Fehr in Zurich.



I think we should do away with these two awards. It simply does not work.

Are PhD dissertations lagging the research frontier?

A doctoral or PhD dissertation is supposed to be work that pushes the research frontier further. Obviously, not all dissertations are created equal and it is to be expected that some will push more that others. But they are all supposed to push. Well, do they? This is something that is quite difficult to measure as one needs to know where the research frontier lies and what the contribution of a dissertation is. For each dissertation, only few people can do this, and it is thus impossible to have an aggregate picture, unless you use a clever trick.

Sheng Guo and Jungmin Lee take publications in top Economics journals as the research frontier and look in which JEL categories they fall. They compare this to the JEL codes for US Economics dissertations and find a strong correlation controlling for the number of jobs available in the field. If you lag the publications by two years, the regression is just as good, which hints that dissertations react to the research frontier rather than the opposite (which is unfortunately undocumented), especially when you consider that with the long publication delays in Economics, the journals are in fact a few years behind the research frontier.

My interpretation here is not quite that of the authors, who really want to understand how students choose their field of study, given that they want to be on the job market with research on a hot topic. But when they start working on it, they do not know yet what will be hot. I am not sure this is quite such a conundrum, as seminars and conferences already give quite a good picture, and working papers as well. But it still looks like dissertations follow the trends instead of creating them.

On the ethics of research cloning

Even though the Journal of Economic Perspectives recently went open access, a move the American Economic Association should be applauded for, I am still receiving physical copies. It is a nice journal to read while lounging in the garden or on a plane ride. The last issue has as usual a good set of interesting articles, including one I had reported on earlier when it was still a working paper. But while checking what I had said about it, I noticed something rather odd: the paper I discussed was ultimately published in the Journal of Economic Behavior and Organization. I had to investigate.

The two papers are by Bruno Frey, David Savage and Benno Torgler. They both report on the sinking of the Titanic and discuss the characteristics of the passengers who survived versus those who perished. Both papers come to the same conclusions. The texts are different, though, and the published regressions are slightly different, with no explanation why, because there is no reference to the other paper. One has therefore to read in much detail to understand what the contribution of each paper is, if there is any.

All this is very fishy. It really looks like the authors are playing games here, trying to get multiple publications out of the same work. They do not mention the other work to fool editors and referees into thinking these are original contributions, as required for any submission to those journals. They tweak the results and rewrite the text so that they cannot be accused of blatant self-plagiarism. This is unethical behavior, but it is not unheard of in the profession.

But like a late-night infomercial, there is a bonus. Looking at the author's CVs, I notice that they have a third publication with the same topic and results, in the Proceedings of the National Academy of Sciences. Bruno Frey has also published two short pieces in German in magazines prior to the academic publications: 1, 2, both pdf.

Now, who are the authors? David Savage is a PhD student at Queensland University of Technology. He must have been following orders of the more senior authors, either without realizing their unethical behavior or watching in horror and not being able to do something about it. Let us give him the benefit of the doubt. His adviser is Benno Torgler, who has already an impressive track record for someone whose first refereed publication was in 2002. His RePEc profile lists 105 working papers and 52 journal articles. Looking at the published works, it seems to like to revisit previous papers by adding new twists to them. Nothing wrong with that, but it may explain why there is no major hit in the publications. There is simply too much slicing and no single slice is a major contribution worth a good publication. But early in his career, he published a series of articles on tax morale using the World Values Survey. Using the same data and the same methodology, he managed to publish several articles whose distinguishing feature is only that they look at a different set of countries: Asia, transition countries, Canada, Latin America, and possibly more. While I must confess that I have not read the papers in detail, there is simply too much material, and Benno Torgler may be innocent, I still find these patterns very disturbing.

It took me some time to figure out where Benno Torgler earned his doctorate. It is at the University of Basel, under the supervision of René Frey (Basel) and Bruno Frey (Zurich), who are brothers, after undergraduate studies at the University of Zurich. Which bring us to Bruno Frey. He is a researcher of international recognition, mostly for his work on welfare economics, happiness research, and critiques of fundamental assumptions in economic models. He credits himself with over 600 published articles and books, an astounding number in Economics. Of course, if this number comes about by slicing papers or republishing known results as described above, this number is less surprising. Looking at his list of major articles, one can surely suspect something is not quite right. I do not have the time (or the will) to go all of this, but there is indeed a lot of rehashing the same themes, which is OK when one uses new data sets or new approaches. But seeing those quantities, that seem unlikely.

Another aspect that I find disturbing in Bruno Frey's record is that his recent work has been railing against the tendency of academics (and especially their administrators and grant makers) to look for quantifiable evidence of their productivity, what he calls "evaluitis." He writes against the pressure to publish and the prominence of rankings of research output. I have reported about some of this writing myself (1, 2, 3). But again he seems to be repeating himself a lot, even in published articles, essentially criticizing a game that he seems to be excelling at. Either he is sarcastic or hypocritical, I cannot decide.

I realize the accusations I am making here can have severe consequences. But I am only accusing, not condemning. I leave the reader the opportunity to make her own opinion, as I have linked to plenty of evidence. I hope to be proven wrong, that these three individuals are indeed extremely innovative and productive. But from what I have seen so far, my prejudice is strongly negative in this regard.

Update (Sunday): I have been alerted that there is a fourth publication about the same Titanic study, in Rationality and Study.

Further update: A follow-up post.

Economists did see the bubble coming

Economists have been lambasted for not alerting the public that a bubble was in the making in US real state, except for a few oddballs. Of course everyone is wiser in hindsight, but what did economists actually say? It never hurts to look at the facts.

Martha Starr analyzes statements in 24 California newspapers from 2002 to 2007. From 1998 to 2005, the state's house prices increased by more than 10% each year. This prompted the newspaper to run 379 stories with 688 statements by economists on house prices. Academics were clearly warning that house prices were not sustainable. Economists employed in the real-industry, however, were resolutely optimistic. What emerges is a mixed message that gave no guidance to the public, which was even reassured by positive messages from the Federal Reserve.

It is entirely possible opinions could have diverged based on the same evidence. But it seems more likely the professionals were not acting in good faith. They had everything to lose from predicting an end of house price growth. The media should have learned not to trust such biased speakers, yet they continue to be interviewed. Now as to why Greenspan and then Bernanke were so optimistic is beyond me. There speeches are definitively strategic and while they may have realized there was a problem, they may have tried to prevent a bubble from bursting too brutally. Then all the credit to them for trying. But one cannot postpone indefinitely a bubble from bursting, and they knew that.

Are hot teachers better teachers?

It is well known that beautiful and tall people have better lives and are better paid. This is especially thought to be true in activities where skills are relatively unimportant. What about economics professors?

Anindya Sen, Marcel Voia and Frances Woolley use the hotness indicators from student evaluations at ratemyprofessor.com in Ontario and find hot economics university professors are paid a whooping 10% more than their less attractive counterparts. Not only is this a large number, it also runs counter to previous results that such effects are limited to unskilled professions. This effect is especially strong for men and not present for women, Indeed women who negotiate hard are not deemed attractive.

In addition, hotter teachers also get better student evaluations, even after controlling for all what the authors could put their hands on. For other indicators of professor productivity, it turns out that hotness affects positively women for citations, although this could be due to a few highly cited women (citation counts are always very skewed). But neither men nor women publish significantly more when hot, but they tend to attract more co-authors. I really need to be careful with my appearance.

Ethics in Economics

Ethical behavior in the Economics profession has so far never been codified or even much thought about. Indeed, economists have the reputation to be easy to buy, just ask any lawyer needing a "expert" to testify. But the recent movie Inside Job has brought to the general public the issue of conflict of interest in the profession, and the American Economic Association seems to have finally picked up the ball. As it is set to draw a code of ethical standards for the profession (New York Times article), one has to evaluate the large task ahead given the many ways in which economists have breached basic scientific conduct guidelines, with rather small consequences. Let me quickly go through a serious of examples to show how little unethical behavior has been sanctioned so far.

The prime example is, of course, the case of Andrei Shleifer, Harvard professor who was a major consultant for the Russian government during the massive privatization of its state-owned industry. Shleifer amassed substantial wealth during this process in ways many think where not legitimate, and in particular the US Department of Justice thought so. In the end, Harvard paid much of the fines, Shleifer is still a professor there and probably one of the richest people in the profession (more).

Or Florencio Lopez-de-Silanes, coincidentally student and frequent co-author of Shleifer, who as director of the Yale Center for Corporate Governance ironically double-billed US$150'000 worth of travel expenses. He was fired despite tenure, but landed on his feet, still active in the profession as a professor in France. (more).

A bit too frequently, the issue is that if someone gets caught with the hand in the cookie jar, he just resigns and lands a job elsewhere where no one suspects anything. The next examples are not documented online or in print, so I will not give names.

Professor A has help full-time appointments at two universities, with none of the two knowing about it. Colleagues grew suspicious when Prof. A would have strange schedules, rearrange classes in odd ways and never be available. The scheme was finally discovered after a few years, and Prof A was summarily fired. However, a few years later he was again holding two full-time positions at different universities...

PhD student B gets caught in massive plagiarism, we are talking here about copy-and-pasting a dozen full articles. Administrators get alerted and promise to dismiss the student. Student B still graduated with a PhD and is now a "respected" free-lance analyst.

PhD student C gets caught copy-and-pasting the entirety of a term paper from a published article. During the investigation it turns out Student C is a repeat offender, the teacher in the previous case failed to follow the proper procedure, Summarily dismissed, the student enrolls in another PhD program and is now close to graduate and already has a research job.

Professor D publishes as sole author the term paper of a student. Gets caught and dismissed. Moves to another country and now holds a chair.

Professor E plagiarizes and gets caught. Is asked to leave from a well-respected US department, applies for a well-endowed chair in another country. The university is impressed to see a candidate of such prestige and hires Professor E, oblivious to the baggage.

Is the AEA going to be able to take care of all these cases? Most likely not, as it is going to focus on conflict of interest. For the other cases, it is going to argue that every university has internal procedures to enforce ethics and in particular plagiarism. But as I showed with the cases above, this is of little use when offenders can simply walk away and act like a virgin elsewhere.

RePEc has a new initiative that would take care at least of the plagiarism cases by exposing them. As the blog post explains, the goal is the shame plagiarizing authors (after proper procedures have been followed) as was as shaming administrations in imposing proper sanctions. I applaud this initiative and I hope it will set an example and reduce the staggering among of plagiarism going on, and perhaps instill more ethical behavior into economists.

Irregular phenomena and the macroeconomics research agenda

Many see the Great Recession, as it is now called, as a dual crisis: an economic crisis and a crisis of economics, and more specifically macroeconomics. We have lived over the past twenty years or so through a period of remarkable economic stability, which also got a fancy name, the Great Moderation, and which gave us the illusion that this stability was to last. The fact that substantial recessions are still possible is a rude awakening, in particular because this one is worse than usual. And economists are the prime suspects because first they did not see it coming, and second they did not know how to react to it.

This is a view that is shared by Alessandro Vercelli who, like others, claims that macroeconomics has had a research agenda that was fundamentally flawed because it only studied regular phenomena, and not irregular ones. Indeed, the real business cycle agenda was centered around model economies in general equilibrium at all times, economies designed to replicate salient features of past data.

Hindsight is always 20/20. The research agenda should have focused on including more features about interbank relations, creation of new assets, moral hazard and adverse selection. But one has to understand that it is very difficult to think ahead what could happen and it is easy to criticize after the fact, and especially without offering alternatives. In fact, the DSGE agenda is remarkably well suited to address new situations: it is based on fundamentals, and these micro-foundations allow to study policies and situations not observed in history. This is something the previous agenda largely based on reduced forms could not address without considerable hand-waving (remember the Lucas Critique?). And if you look at the papers written nowadays, macroeconomics seems to have picked up the ball very nicely.

At first, macroeconomists did not have answers ready, or rather they did not have the answers that politicians wanted to hear, namely that something needed to be done. In the face of a crisis, every politician wants to do "something" to show "action". If the economist says that that one should let nature run its course, that one has to bite the bullet and let some banks fail, in particular so as to avoid future moral hazard risk, then the politician will bypass the economist and fall back on the first one that will satisfy him, and he is Keynesian.

Macroeconomics did not suddenly turn Keynesian, politics did. And doing so it compounded the problem and then lead to a crisis of Keynesian nature where nobody trusts anybody and aggregate demand is seriously lacking because nobody in the economy dares to invest due to huge policy uncertainties. Is the central bank still independent from the politicians or not? Seeing Bernanke and Paulson go hand in hand to testify to Congress was the worst possible image of this crisis. What is up with fiscal policy? Are the public deficits going to be taken care of through major tax increases or inflation? The policy prescription seems quite simple: decide once for all, should some courage to impose your policy and be done with it.

Economic thinking in Bulgaria after the fall of the Berlin Wall

Economic thought, especially in macroeconomics, goes through episodic changes. These changes are very slow to occur, and historians of economic thought try to analyze what brought these changes and how they happened. The recent doctrinal changes in Eastern Europe offer in this respect a particularly interesting exercise, because everything happened very fast. In particular, you did not even have to wait for an old generation to retire or die for fundamental changes to happen.

Nikolay Nenovsky studies, from personal experience, what happened in Bulgaria. The evolution there was particularly dramatic there because the Russian Perestroyka was largely ignored by the political and intellectual class, and thus change had to happen much faster thereafter. Also, the economic transition happened in a theoretical vacuum, as only transition to communism was researched. Subsequently, economic research was largely event driven, reacting to price liberalization, restructuring of state ownership, foreign debt issues and the currency board.

Previous to reforms, economists were in two camps: those who studied socialism, and those who were to point out the ills of capitalism. The latter were much more ready to understand the transition and emerged as intellectual leaders. The first found refuge in Keynesianism and institutional economics. Bur all lacked empirical skills, and, ironically, sociologists took this over. But the big agents of change were the World Bank and the IMF, through their missions and advice, and imported western textbooks. Nowadays, western thinking has been adopted without much discussions about its fundamentals. Microeconomics is largely neo-classical, and macroeconomics mostly Keynesian. The latter is not surprising, given where Bulgaria is coming from.

The AEA is missing a golden opportunity

The American Economic Association is asking its membership to approve a drastic restructuring of its dues. There are two reasons for this. One, the AEA is swimming in money (despite last year's fiasco with the Economists calendars) and would have difficulties maintaining its non-profit status with fiscal authorities. Two, by default members get hard copies of the journals and need to opt out to reduce their membership fee. By making the default membership without journals, the AEA hopes to save on printing costs and thus can lower the average membership fee even more.

I will vote against the change not because I dislike a decrease in the fee, but because I believe the AEA has missed here a tremendous opportunity of putting its journals in open access. This is a society with a sound financial basis that could set an example for the rest of the publishers by showing that good research should not be gated. Would this be a money losing proposition? I do not think so, first because the AEA will always have good income from its meeting registrations, and second because it would not need to maintain anymore a whole infrastructure to keep outsiders away from its journals. The AEA could probably cancel membership fees altogether and still make it work.

NB: I realize that the Journal of Economic Perspectives was recently partially put in open access. This shows that the AEA is open to the concept.

The strange dynamics of faculty merit pay

In many US universities, faculty performance is rewarded with merit bonuses or increases, the initial idea being to prevent other universities from poaching the best performers. But seeing how this is approached in a very heterogeneous way across institutions, one sometimes wonders whether the merit process is done optimally.

Finn Christensen, James Manley and Louise Laurence had access to much relevant data in a large public university. There, merit pay is distributed in each department by a committee of tenure faculty. The outcome is that about two thirds of all faculty reach the highest merit scale, three fourths among tenured faculty. Now this outcome could be justifiable with additional data, which the authors have for a particular college in this university in the form of various output measures that should matter for evaluation. It turns out that untenured faculty is as productive, but still gets less merit pay. Even worse, it appears that the output measures explain about 10% of the variation in merit.

What is going on? Christensen, Manley and Laurence show theoretically that given the institutional structure, one should not be surprised by these results. I can believe that, and this is probably compounded by compression: as new faculty commands higher pay than old, the old compensate with higher merit. The authors find little evidence of this. Internal politics also certainly play a role, as you want to avoid offending someone who may be determining your merit later. But what is clear is that there is, at least at this place, very little transparency in merit attribution.

Business research is as out of focus as Economics

There is quite a bit of soul searching in Economics, as the current crisis has highlighted that some research areas had been covered less than optimally. Political science also has its crisis, following severe cutbacks in US federal research grants. It turns out business research is also in introspection mode.

Maggie Geuens claims that business research is not useful anymore. Specifically, the author tries to make five points:

1. The focus of research is other academicians, and not businesses.
   
2. Publication is all about impact (within academics) and citations.
   
3. Negative results never make it out.
   
4. Having to craft a well polished paper is a crass misuse of a researcher's time.
   
5. There is too much reliance on impact factors and citations.
   

This could also have been written for Economics. I really struggle with this obsession about getting prestige within the profession over making useful contributions, especially among the younger generation. And unfortunately, this is more pronounced in the top departments, and these are the ones that will give us the next generations. We really need a wake-up call in the profession that economic research should primarily be about improving global welfare, not a pissing contest among academicians.

Are academics still dysfunctional in Italy?

Academics, at least in Economics, have been largely dysfunctional in Italy for a long time. With faculty positions centrally administrated by the Ministry of Education, competitions rigged against people coming from abroad, and newcomers have first to pay their time in the purgatory (the South or the islands), there have been very few incentives for quality people to stay or return to the country. Hence a very large diaspora of Italian economists throughout the world who even have organized themselves into a separate society to try to shake things up. Things have moved, a little bit, as universities have now more autonomy in hiring, and one can wonder whether this has done any good.

Adriano Birolo and Annalisa Rosselli provide an assessment of the quality of new hires into entry-level positions around 1985, 1995 and 2005. While the number of hires seems to have substantially increased, their quality does not seem to have. While they may publish more, they do so with substantially more co-authors. where there seems to be some change is in the topics of research. Italy has always had a very strong tradition in the history of economic thought, indeed a sixth of all publications were devoted to this in the 1980s, and this emphasis seems to dwindle to the advantage of Microeconomics, which was virtually absent. So at least in terms of research topics, Italy is becoming less of an oddball.

How to avoid academic deadwood

Everybody who has ever worked in an academic environment has complained about academic deadwood: tenured professors who do not contribute to research and often do not contribute much to anything else as well. The tenure system is often blamed, as it makes it very difficult to fire someone for underperforming. But even if there is an incentive structure, like merit increases in pay, they clearly have less bite for old faculty who will benefit from them for a shorter time.

I have always been on the lookout for a solution to this academic deadwood problem, thus when I stumbled upon this paper by Yu-Fu Chen and Gylfi Zoega, I was very hopeful. They draw a life-cycle model with unobservable research effort, while administration and teaching are observable. The paper comes to the conclusion that only the senior professors who enjoy research will do any, and thus heterogeneity in research keeps increasing with age. Nothing new here. Where a model becomes really useful is with policy prescriptions: how could the incentive structure be changed? Is is better not to have a tenure system? But none of that. How disappointing.

Here is my take at it, but without the benefit of having worked out a structural model. 1) Tenure needs to be weakened. While it was instituted to preserve academic freedom when research could not be evaluated, we have now plenty of metrics fro research performance. Doing poorly on those should be punishable. 2) Merit raises for good performance need to increase with age to counter the fact that older faculty benefit from them for a shorter time. 3) There needs to be much more flexibility and heterogeneity in teaching loads for senior faculty, so as to balance total effort.

Filtering scholarly information

With the enormous quantity of research being published nowadays, it is easy to feel overwhelmed by all this information. While Paul Samuelson could claim in the 1940s to have read all research there was, that statement is now impossible, even in a subfield. Clearly, there needs to be some way to filter this output, a role that traditionally journals have had. But, as I mentioned before, journals are not particularly useful, especially in Economics, because of huge publication delays and the fact that most are gated. Working papers are the way to go, but they are not peer reviewed, and there needs to be some sort of a filter.

I mention this because Omar Al-Ubaydli and Rufus Pollock address the filtering issue and argue that there should be an open and decentralized mechanism for doing so, with the help of digital technology. They argue that given that publishing nowadays is so cheap, there is no reason really to have gated journals, they should be open access, and there is no reason that journals should have exclusivity on articles. In cannot agree more. A paper may be of interest to several audiences, why would only one benefit from it? And why would you want to hide it behind a costly gate? And let commercial publishers exploit their market power?

But why go to open access journals? Why not bypass journals entirely and let the peer review process be handled by citations and discussions on blogs like this one or the others listed at EconAcademics? This process is certainly open and decentralized, and don't we believe that the market mechanism can lead to efficient allocations without central intervention? For one, I do not see where the market failure would be. And we have the institutions in place to handle the necessary monitoring, with NEP and the RePEc rankings.

New RePEc journal rankings

RePEc has recently expanded its rankings of economists, institutions and publications. The portion of rankings that is now public has now expanded, which is good. Among the new rankings, two have caught my eye.

First, there is now a separate ranking for US Economics departments. The usual suspects are on top, with the exception of Yale (some faculty prefer to affiliate with Cowles) and the University of North Carolina (75!). It also shows how low Rochester has fallen (67) and how low my fellow bloggers at George Mason rank (95). Among the pleasant surprises, I notice Williams College (63), Chapman University (69), and Appalachian State University (93). Liberal arts colleges can produce better research than R1 universities.

Second, there is also an aggregate ranking for journals. Previously, only separate rankings were provided for each criterion, which made comparisons difficult. The new ranking yields rather few surprises, and thus should be really useful. Indeed, it is continuously updated, contrarily to other rankings that quickly depreciate.

There is no surprise in the sense that the four big journals are on top, although not in the order I would have expected. I have not read an article in the QJE or Econometrica for a long time, whereas AER and JPE continuously have interesting material. I confess that I rather read working papers than journal articles, and thus those that get published are sometimes already known to me, but I am still puzzled by the high impact factors that QJE and Econometrica get. In some sense, the JPE may be penalized here because all its volumes are on RePEc, and given that generally the material on RePEc is newer, older articles do not gather citations. And the AER is penalized by its Papers and Proceedings issue, which drags the impact factor down. But this should be compensated by the inclusion of download statistics in the aggregate ranking.

Further down the ranking, the Journal of Economic Growth is surprisingly well placed at 6. It publishes very few papers and must be following a very strict acceptance policy. The ratio of citations to articles is thus high, but I would not call it an impact factor, as the journal is small. Another surprise is Economic Policy at 15. I cannot even remember having this journal in my hands.

Another interesting result: some young journals are already doing well. I mentioned the Journal of Economic Growth, and the Review of Economic Dynamics and the Journal of the European Economic Association are also in the top 30. The latter are already better than the Journal of Economic Dynamics and Control and the European Economic Review, two journals the respective societies left after a row with Elsevier.

Neoliberalism and the Church

When I talk to representatives of some churches, or to anti-globalisation advocates, they constantly blames all the evils in the world on neoliberalism, and us economists are the ones who have imposed neoliberalism on the world. Yet, I do not know what neoliberalism is.

I just read through Stan Duplessis' dissection of the Accra Declaration and I take this opportunity to highlight the disconnect between the Church and Economics. The Accra Declaration was adopted in 2004 at a meeting of the World Alliance of Reformed Churches. The Declaration first lists all the ills of the current world: poverty, famine, wars, limited access to drugs, environmental degradation, and pandemic disease. Then it argues without transition that they are "directly related to the development of neoliberal economic globalisation... an ideology that claims to be without alternative, demanding an endless flow of sacrifices from the poor and creation", and then argues that Neoliberalism "...makes false promises that it can save the world through the creation of wealth and prosperity, claiming sovereignty over life and demanding total allegiance, which amounts to idolatry". Wow. Neoliberalism appears thus to be a powerful cult, that could be thus be competing against established religions.

What are the tenets of Neoliberalism? Again, I need to refer to the Declaration, through the quotes in Duplessis' piece to get a definition:

1. Unrestrained competition, consumerism and the unlimited economic growth and accumulation of wealth are the best for the whole world;
   
2. The ownership of private property has no social obligation;
   
3. Capital speculation, liberalization and deregulation of the market, privatization of public utilities and national resources, unrestricted access for foreign investments and imports, lower taxes and the unrestricted movement of capital will achieve wealth for all;
   
4. Social obligations, protection of the poor and the weak, trade unions, and relationships between people are subordinate to the processes of economic growth and capital accumulation.
   

What this defines is complete anarchy, with no role whatsoever for the government. I cannot think of a single economist who would argue for such an agenda. Even, I would say that economists continuously grapple with many forms of market imperfections or failures and how to define policies (implemented by a government) that deal with these issues. It is true that economists point out that governments have weaknesses, and that markets and prices are powerful allocation mechanisms, but they have recognized limits. Liberalization has its place in some situations, and the resistance to it comes usually from some parties that lose rents from regulation. No one advocates liberalization at any cost, and transition costs are recognized to be often large.

Our world is rich, but unevenly so. I am particularly annoyed when people push for limits to the flow of this wealth across the world in order to satisfy entrenched interests. For example, those who have the most to gain from free trade are the poor of this world, because it gives them access to larger markets, allows them to obtain jobs and income that pulls them from their traps. The world economy is not a zero sum game, where whenever someone gains somebody else must be losing. The gains from exchange are substantial. Churches should learn this, instead of offering resistance to any change and accuse a supposed ideology of all the ills, many of which actually could be at least partitially be solved by opening up. Churches should give the poor a chance to participate in this world.

Why criticize modern macro when you do not follow modern macro?

Economics and in particular macroeconomics have come under assault lately because they supposedly were not able to identify the housing bubble and warn about the dangers in the banking sector. It has thus become fashionable to bash the field. It perfectly fine to review the basic tenets of research, this is part of the scientific process. Still, this needs to be done with a good understanding of the current state of the field.

Richard Holt, Barkley Rosser and David Colander claim that neoclassical economics is now dead and a new era has now begun, which they call "Economics of Complexity." I think we all agree that an economy is a complex object, none the least because you have many different people interacting. Like in other sciences, we use models that are simplified abstractions of the reality in order to understand it. One could argue that one simplifies too much, but often the resulting basic intuition is enough to understand what is going on. Sometimes more complexity is necessary, and can certainly no accuse macroeconomics of shying away from complexity. The days of analytically solvable models, even representative agent models are long gone, there are frictions galore and market imperfections are frequent modeling features. But this is still done within models that are clearly of a mainstream neo-classical tradition.

So why do Holt, Rosser and Colander claim that the future economics "is a vision that sees the economy as so complicated that simple analytical models of the aggregate economy—models that can be specified in a set of analytically solvable equations—are not likely to be helpful in understanding many of the issues that economists want to address. Thus, the Walrasian neo-classical vision of a set of solvable equations capturing the full interrelationships of the economy that can be used for planning and analysis is not going to work"? While I can this in say, international trade and public economics, macroeconomics, which is the most under fire, has in fact made that step long ago.

What do they concretely see coming in economics? "Instead, we have to go into the trenches, and base our analysis on experimental and empirical data. From there we build up, using whatever analytic tools we have available. This is different from the old vision where economists mostly did the opposite of starting at the top and then built down." That is not economics they are talking about, this is statistics. Also, when talking more about theory, they say "combined, these changes can be summarized as a movement in economics from a textbook economics of rationality, selfishness, and equilibrium to a new economics of purposeful behavior, enlightened self-interest, and sustainability. What they are criticizing here is the Max U paradigm, but when you think about it, "purposeful behavior" is rationality with information problem, "enlightened self-interest" is selfishness with a some altruism, and "sustainability" is about multiple equilibria, which are common in heterogenous agent models. There is nothing new here, and such modeling features are routinely used.

Does this mean the "Economics of Complexity" of the future is already happening? Probably. It is just that Holt, Rosser and Colander have not noticed it yet, despite the fact that it has been pursed for to decades already. Consider this gem: "the thought that one could develop a micro foundation of macro without considering the feedback of the macro system on the individual is beyond belief." Did they read any macroeconomics paper published in the last twenty years?

About tenure

Getting tenure in many academic institutions is very stressful, as requirements are high, and often higher than for those who obtained tenure before and decide on one's fate. It should thus not be a surprise that some people crack, in one case unfortunately leading to a shooting spree yesterday.

But is tenure really worth all this stress? Tenure decisions too frequently lead to internal strife, and someone who has finally obtained tenure after a long battle and appeals ends up leaving anyway most of the time because relationships with colleagues are strained. And even in clear-cut tenure cases, tenure is not Nirvana. Take this nice presentation of myths about tenure from the National Education Association. In short, tenure does not guarantees a lifetime job. It only gives a right to due process. And there are plenty of ways to make a tenured professor feel the consequences of under-performance. Also, it appears that on average tenured faculty teach and publish more than untenured ones. And academic freedom is not much different whether one is tenured or not.

Tenure is not what it is advertised to be. With tenure, one is virtually locked in place, as other institutions would not hire you without tenure, and hiring with tenure is a huge deal and thus much less likely. Being unhappy with tenure is worse than unhappy without tenure in some cases, as mobility is higher in the latter.

In my case, I wished tenure were not an option. I do not need tenure as a motivation to teach well and do good research. I am sufficiently interested to continue doing so after getting tenure. Tenure does not change anything. I am not interested in promotion, as it really mans taking on responsibilities that I can do without, like sitting on useless committees. Just evaluate me, reward me and punish me according to my performance. And if I am not happy about how I am treated, just let me test the market without having to force my tenure on other institutions.

The proliferation of journals and desk rejects

Notice how journals seem to proliferate like bunnies? And that more and more journals implement a desk reject policy? Why would editors not even bother sending a paper to referees? Probably because the paper is an obvious misfit, for example because of a topic mismatch. It makes you really wonder why authors would that ill-informed about the topic of the journals they are submitting to. But the rise of desk rejection policies and the increasing number of journals be linked?

Damien Besancenot, Kim Huynh and Radu Vranceanu address this with tools from the labor search literature. The key variable in the matching function is the ratio of editors (journals) to authors. In particular, as the cost of publishing has dramatically decreased, the number of editors increases, thus making publishing easier for authors. However, a consequence of this is that submission fees must increase to maintain surplus sharing, as the authors put it but I fail to understand. I would have expected the reduction in costs and the increased competition to result in lower submission fees. It can only be because authors value more publication than before, and there is evidence for that as more and more universities reward published research.

Obviously, the model is a simplification of the true editorial process. But the fact that an editor can be handling only one paper at a time is a serious drawback. A rejection or a revise/resubmit becomes then very costly, while high rejection rates are generally regarded as contributing to the value of a journal. The observed crowding of some journals seems to me to be a more important determinant of the adoption of a desk rejection policy. But in the end, the model does not have an endogenous desk reject, and thus fails to answer the question initially posed.

Economists are less generous, but not by indoctrination

From many experiments, it is known that economists are more selfish than others. the interesting question is whether selfish people select themselves into Economics, or whether Economics students get indoctrinated by the material they are covering in classes.

Yoram Bauman and Elaina Rose use data from students at the University of Washington to elucidate this. There, students can donate to social programs each quarter. This is tracked along with their taking Economics classes. While Economics majors are indeed less generous, this does not appear to evolve over time. One can thus conclude this is a section effect. However, non-majors become more selfish once exposed to Economics. In other words, economists are quite convincing.