Is macroeconomics a science?

Article Highlights

  • As Charles Wolf shows, macroeconomics is not a science.

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  • Macroeconomics can never become a science because it is a matter of predicting the reactions of human beings.

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Is macroeconomics a science? Charles Wolf shows how it is not. "True believers in either policy, which include Nobel Prize winners on both sides," he writes, "discount the results." In other words, the data cannot settle the arguments, which are largely a matter of belief and thus not a science—Q.E.D. But can macroeconomics ever become a science sometime in the future? Mr. Wolf also tells us why it can't: It is a matter of predicting reactions of human beings, whose reactions change in response to the actions based on the predictions. From this, it is easy to see why those who believe that governments and central banks can manage economies will always be disappointed.

Alex J. Pollock
American Enterprise Institute
Washington

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About the Author

 

Alex J.
Pollock
  • Alex J. Pollock is a resident fellow at the American Enterprise Institute (AEI), where he studies and writes about housing finance; government-sponsored enterprises, including Fannie Mae, Freddie Mac, and the Federal Home Loan Banks; retirement finance; and banking and central banks. He also works on corporate governance and accounting standards issues.


    Pollock has had a 35-year career in banking and was president and CEO of the Federal Home Loan Bank of Chicago for more than 12 years immediately before joining AEI. A prolific writer, he has written numerous articles on financial systems and is the author of the book “Boom and Bust: Financial Cycles and Human Prosperity” (AEI Press, 2011). He has also created a one-page mortgage form to help borrowers understand their mortgage obligations.


    The lead director of CME Group, Pollock is also a director of the Great Lakes Higher Education Corporation and the chairman of the board of the Great Books Foundation. He is a past president of the International Union for Housing Finance.


    He has an M.P.A. in international relations from Princeton University, an M.A. in philosophy from the University of Chicago, and a B.A. from Williams College.


  • Phone: 202.862.7190
    Email: apollock@aei.org
  • Assistant Info

    Name: Emily Rapp
    Phone: (202) 419-5212
    Email: emily.rapp@aei.org

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