Important advice from Eichengreen

The economics profession was arguably the first casualty of the 2008-2009 global financial crisis. After all, its practitioners failed to anticipate the calamity, and many appeared unable to say anything useful when the time came to formulate a response. But, as with the global economy, there is reason to hope that the discipline is on the mend.

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These developments amount to a sea change in economics. As recently as a couple of decades ago, empirical analysis was informed by relatively small and limited data sets. To be sure, analytical frameworks are still needed to help make sense of the data. But now there is reason to hope that, in the future, economists’ conclusions and policy advice will be shaped not by those frameworks’ elegance, but by their ability to fit the facts.

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