When Has Economics Been Correct on Anything Important?

The discussion over at Marginal Revolution of famous economists’ errors is a reminder that economics is, in many ways, most famous for how badly it gets things wrong. After all, as I posted earlier, the current AEA meetings contained no papers referencing Keynes, and precious few about the current credit crisis. Economists’ record for prescience and accuracy are … checkered at best.

Anyway, a MR reader gets the question about right:

Mistakes in economics is a dull subject.
The truly electrifying inquiry would be to name 10… well… 5… OK just 3 incidents when economics made indisputably correct (in a rigorous scientific sense – since economics dare to call itself a science) prediction/forecast on a more or less significant scale

After some thinking I have my own ideas, but rather than biasing things does anyone want to try the question on?


  1. Clearly the commenter referenced in the post has no clue about economics, because if he did, he would know economics as a science has nothing to do with making 'indisputably correct predictions.' Indeed, economics doesn't make corrections at all; it deals in probabilities. The commenter probably has an MBA. Pffttt.

  2. Paul Kedrosky says:

    Craig — Nice post. Thanks for the ground-level insights. Like you,macro has always struck me as a kind of abstract art, so interestingto hear others feel similarly. The more micro specific stuff –especially empirical work, as opposed to modeling — has shaped mythinking in many useful ways.