The systemic failure of economic methodologists

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This paper argues that economic methodologists failed to point out to the profession or to policy makers that the method macroeconomists (and applied economists generally) were using was problematic, and therefore bear a portion of the blame for macroeconomics' failure to prepare for the recent financial crisis. The reason they did not was systemic; they did not see doing so as their job. The paper argues that the systemic failure of the economics profession in the financial crisis and the systemic failure of economic methodologists reflect the same cause. Both groups see their primary role as detached scholars or as scientists providing abstract understanding, not as engineers whose primary role is to provide insight and analysis for individuals attempting to achieve better real-world outcomes. Rather, they see themselves as detached scholars. This paper argues that the roles should be reversed – the economics profession's primary goal should be achieving better real-world outcomes, and its secondary goal should be better understanding of the economy for the sake of understanding.