Steve Keen on the Nobel Prize for Economics

As well as an interesting perspective on Australian house prices, Steve Keen gives an opinion about the Nobel Prize for economics - i.e. it is really not a "science", in terms of providing clear answers. That does not mean that economics cannot contribute to all sorts of issues, just that it is a case of "buyer beware".

Economics’ odd couple highlights a Nobel folly

  By Steve Keen | October 21, 2013 | Debtwatch

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I would love to be in the audi­ence watch­ing the body lan­guage at this year’s “Nobel” cer­e­mony for eco­nom­ics. Robert Shiller, who is far too polite a per­son to make it obvi­ous, will nonethe­less at least fid­get as he lis­tens to Eugene Fama’s speech, since Fama con­tin­ues to dis­pute that bub­bles in asset prices can even be defined. Shiller, in con­trast, first came to pub­lic promi­nence with his warn­ings in the early 2000s that the stock and hous­ing mar­kets in the States were dis­play­ing signs of “irra­tional exuberance”.

Fama came to promi­nence within eco­nom­ics – though not in the wider body politic – in the 1970s with his PhD research that argued that asset mar­kets were “effi­cient” not just a first order (get­ting the actual val­ues right) but even to a sec­ond order (pick­ing the turn­ing points in val­u­a­tion as well).

How can two such dia­met­ri­cally opposed views receive the Nobel Prize in one year? The equiv­a­lent in physics would be to award the prize to one research team that proved that the Higgs Boson existed, and another that proved it didn’t.

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