Bryan Caplan  

The Journal I'd Most Want to Edit

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I think Sumner's being tongue-in-check, but here's his genuinely good idea for a new journal:
Most economists obviously disagree with me.  The top economists are constantly making predictions that violate the EMH.  OK, then why not set up a new journal, the Journal of Economic Predictions.  Each month they would publish 25 to 30 short predictions about the economy or asset prices.  After 30 years we'd have 10,000 predictions, a pretty good track record of whether economists actually had the ability to make useful predictions.  Those who think my skepticism is misplaced could set up a mutual fund that invested a little bit of money on the basis of each JEP prediction.  With so many predictions it would be highly diversified.  If economists' predictions are superior to dart tossing, then the mutual fund would outperform index funds.
Yesterday my colleague Dan Klein presented a new paper on the importance of the allegory of communication in economics.  My main objection: Comparing market prices to communication is unfair to market prices.  Much, if not most, "communication" is fruitless blather.  A Journal of Economic Predictions, in contrast, would be news we could use.


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COMMENTS (8 to date)
genghis writes:

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infopractical writes:

This is exactly the kind of idea that is going to irk economists who make their living pushing ideological beliefs with no real world viability. It's a great idea, but it's been discussed before and the people who discuss it seriously tend to just start hedge funds. Who would find this kind of experiment valuable and interesting who would not just take the leap to managing the applications of their own ideas?

jsalvati writes:

You know, that really is a good idea. It should also serve as an official arena for interesting bets.

Nick writes:

Sounds like Google's future machine which aggregates and categorizes predictions of future trends/events.

blink writes:

Yes, this would provide superior information and I hope to see it happen. I think you unfairly dismiss conversation for failing to convey information, though. If you agree with Robin that "talk isn't about info", calling it "useless blather" makes about as much sense as saying eating is "mindless chomping" (as it might well be if eating were about nutrition)!

Jeremy, Alabama writes:

I really like this suggestion.

Predictions should include the model that was used. I care less about the predictive power of economists than the predictive power of models.

In fact, if models are "open-source", you can do this yourself, on your blog. Pick some specific numerical prediction that 3 or 4 models disagree on, get the model author to agree that you applied the model correctly, and track it.

Peter G. Klein writes:

Bryan, on the analogy between communication and exchange, you'll appreciate this passage from Bartley's Unfathomed Knowledge, Unmeasured Wealth:

Analogies have often been drawn between a free market in ideas and free markets in goods and services. Yet intellectuals tend to dislike such comparisons. They see the free market in ideas as something on a higher plane, qualitatively different from free markets in commodities and the like. Many of them indeed even hate the marketplace as traditionally conceived, and would want nothing to do, even analogically, with a free market in coal, housing, fish, or petroleum.

Take a few examples. Several scholars, including Edward Shils, of the University of Chicago, strongly protested the analogy when it was drawn by Michael Polanyi at the Congress for Cultural Freedom. One called Polanyi’s comparison between free markets in goods and in ideas “clever but questionable” in that a man who offers commodities in the free market “is not bound by anything” whereas in science one is bound to an objective method. Shils added that members of the scientific community, by contrast to businessmen and traders, act in accordance with overriding standards, a “common law” above and beyond individuals.

Such a position does not withstand examination. Someone offering commodities in a market — far from being “not bound by anything” — is governed by enforceable law relating to fraud, credit, contract and such like. The analogy does have limits, but of a different sort: in the marketplace of ideas, fraud, plagiarism, theft, false advertising (including false claims to expertise and the whole mystique of expertise), “conspiracies of silence,” casual slander and libel, breach of contract, deceit of all sorts are more common than in business — simply because there are few readily enforceable penalties against offenders, whereas “whistle-blowers” are severely punished. This is so especially in those areas (the humanities, social sciences, the arts — as opposed to the profitable fields) where the transaction costs of enforcing such things as property rights, priority claims, or even accurate report5ing usually outweigh the advantage in doing so, and where the transaction costs of trying to defend oneself against such things as slander are prohibitive.

Scott Sumner writes:

There are times when I wished I had held my "tongue-in-check". But this was more tongue-in-cheek.

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