nep-sog New Economics Papers
on Sociology of Economics
Issue of 2009‒03‒22
five papers chosen by
Jonas Holmström
Swedish School of Economics and Business Administration

  1. The Financial Crisis and the Systemic Failure of Academic Economics By David Colander; Hans Föllmer; Armin Haas; Michael Goldberg; Katarina Juselius; Alan Kirman; Thomas Lux; Birgitte Sloth
  2. Can European Economics Compete with U.S. Economics? And Should It" By David Colander
  3. University Quality and Graduate Wages in the UK By Hussain, Iftikhar; McNally, Sandra; Telhaj, Shqiponja
  4. The USDA Graduate School: Government Training in Statistics and Economics, 1921-1945 By Malcolm Rutherford
  5. Internationalization of U.S. Doctorate Education By John Bound; Sarah Turner; Patrick Walsh

  1. By: David Colander (Department of Economics, Middlebury College); Hans Föllmer (Department of Mathematics, Humboldt University Berlin); Armin Haas (Potsdam Institute for Climate Impact Research); Michael Goldberg (Whittemore School of Business & Economics, University of New Hampshire); Katarina Juselius (Department of Economics, University of Copenhagen); Alan Kirman (GREQAM, Université d’Aix-Marseille lll); Thomas Lux (Department of Economics, University of Kiel); Birgitte Sloth (Department of Business and Economics, University of Southern Denmark, Odense)
    Abstract: The economics profession appears to have been unaware of the long build-up to the current worldwide financial crisis and to have significantly underestimated its dimensions once it started to unfold. In our view, this lack of understanding is due to a misallocation of research efforts in economics. We trace the deeper roots of this failure to the profession’s focus on models that, by design, disregard key elements driving outcomes in real-world markets. The economics profession has failed in communicating the limitations, weaknesses, and even dangers of its preferred models to the public. This state of affairs makes clear the need for a major reorientation of focus in the research economists undertake, as well as for the establishment of an ethical code that would ask economists to understand and communicate the limitations and potential misuses of their models.
    Keywords: financial crisis; academic moral hazard; ethic responsibility of researchers
    Date: 2009–03
  2. By: David Colander
    Date: 2009–02
  3. By: Hussain, Iftikhar (London School of Economics); McNally, Sandra (London School of Economics); Telhaj, Shqiponja (London School of Economics)
    Abstract: We examine the links between various measures of university quality and graduate earnings in the United Kingdom. We explore the implications of using different measures of quality and combining them into an aggregate measure. Our findings suggest a positive return to university quality with an average earnings differential of about 6 percent for a one standard deviation rise in university quality. However, the relationship between university quality and wages is highly non-linear, with a much higher return at the top of the distribution. There is some indication that returns may be increasing over time.
    Keywords: returns to education, university quality
    JEL: I23 J24
    Date: 2009–02
  4. By: Malcolm Rutherford (Department of Economics, University of Victoria)
    Abstract: The USDA Graduate School was founded in 1921 to provide statistical and economic training to the employees of the Department of Agriculture. The School did not grant degrees, but its graduate courses were accepted for credit by a significant number of universities.After its founding, the activities of the School grew rapidly to provide training in many different subject areas for employees from almost all Government Departments. The training in statistics provided by the School was often highly advanced (instructors included Howard Tolly and, later, Edwards Deming), while the economics taught displayed an eclectic mix of standard and institutional economics. Mordecai Ezekiel taught both economics and statistics at the school, and had himself received his statistical training there. Statistics instruction in 1936 and 1937 included seminars from R. A. Fisher and J. Neyman, and courses on sampling theory involving Lester Frankel and William Hurwitz became important after 1939. The instruction in economics was noticeably institutionalist in the period of the New Deal. Towards the end of the period considered here the instruction in economics became narrower and more focused on agricultural economics. The instruction given provides a basis for understanding the sources of the relative statistical sophistication of agricultural economists in the interwar period. It also provides a light on the place of institutional economics in the training of government economists through the same time span. It is noteworthy than within the USDA Graduate School, and in contrast to the Cowles Commission, statistical sophistication co-existed with an approach to economics that was not predominantly neoclassical.
    Keywords: Department of Agriculture, Agricultural Economics, Statistic, Institutional Economics, Training
    JEL: B2 C1 Q1
    Date: 2009–03–13
  5. By: John Bound; Sarah Turner; Patrick Walsh
    Abstract: The representation of a large number of students born outside the United States among the ranks of doctorate recipients from U.S. universities is one of the most significant transformations in U.S. graduate education and the international market for highly-trained workers in science and engineering in the last quarter century. Students from outside the U.S. accounted for 51% of PhD recipients in science and engineering fields in 2003, up from 27% in 1973. In the physical sciences, engineering and economics the representation of foreign students among PhD recipients is yet more striking; among doctorate recipients in 2003, those from outside the U.S. accounted for 50% of degrees in the physical sciences, 67% in engineering and 68% in economics. Our analysis highlights the important role of changes in demand among foreign born in explaining the growth and distribution of doctorates awarded in science and engineering. Expansion in undergraduate degree receipt in many countries has a direct effect on the demand for advanced training in the U.S. Changes in the supply side of the U.S. graduate education market may also differentially affect the representation of foreign students in U.S. universities. Supply shocks such as increases in federal support for the sciences will have relatively large effects on the representation in the U.S. of doctorate students from countries where demand is relatively elastic. Understanding the determinants – and consequences – of changes over time in the representation of foreign born students among doctorate recipients from U.S. universities informs the design of policies affecting the science and engineering workforce.
    JEL: I2 I23
    Date: 2009–03

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