Ten years ago, ultra-mathematical theorists were the kings of the economics profession. Now they seem to be nigh irrelevant. Clever and relatively open-minded empiricists rule the roost. Cementing the trend, few of the students coming out of top programs are math theorist types.
How did this transformation happen?
First, is there a smaller pool of mathematical types going into graduate work in economics? I could imagine that happening, because there is a lot of excitement going on in other fields that would draw people from that talent pool, including computer science, nanotechnology, and biotechnology.
Second, are students seeing the better journals tilt away from mathematical theory? It seems to me that one can see such a tilt, at least in the American Economic Review. Getting hired as a mathematical theorist is not worth much if your publication prospects are poor.
Third, is there just a general increase in interest in empirical work relative to mathematical theory? The Clark Medal lately has been going to economists more known for their empirical work.
Maybe the dominance of mathematical theory was just a bubble, and the question should be how it sustained its momentum as long as it did.