George Akerlof, a Nobel laureate in economics, is Professor of economics at the University of California, Berkeley. Joseph E. Stiglitz, University Professor at Columbia University and winner of the 2001 Nobel Memorial Prize, served as Chairman of the Commission on the Measurement of Economic Performance and Social Progress. Let A Hundred Theories Bloom is from Project Syndicate's Unconventional Economic Wisdom series.
Let A Hundred Theories Bloom
By George Akerlof and Joseph Stiglitz
BUDAPEST – The economic and financial crisis has been a telling moment for the economics profession, for it has put many long-standing ideas to the test. If science is defined by its ability to forecast the future, the failure of much of the economics profession to see the crisis coming should be a cause of great concern.
But there is, in fact, a much greater diversity of ideas within the economics profession than is often realized. This year’s Nobel laureates in economics are two scholars whose life work explored alternative approaches. Economics has generated a wealth of ideas, many of which argue that markets are not necessarily either efficient or stable, or that the economy, and our society, is not well described by the standard models of competitive equilibrium used by a majority of economists.