How Influential is Economics?

Economists often claim that their discipline has a great influence on the economy. An analysis of the existing literature reveals, however, that little convincing empirical evidence exists. The two approaches used are subject to major shortcomings. The ‘Economics Production Function' relating the input of economic ideas to economic outcomes, is faced with major estimation problems. The ‘Revealed Behaviour Approach' of choosing to study economics is based on very restrictive assumptions. It is argued that the ‘Case Study Approach' analysing specific policy instances constitutes a more promising avenue and should be undertaken to identify more general patterns of influenc