Is macroeconomics a science?
Alex J. Pollock | The Wall Street Journal
May 27, 2013

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Article Highlights

  • As Charles Wolf shows, macroeconomics is not a science.

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  • Macroeconomics can never become a science because it is a matter of predicting the reactions of human beings.

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Is macroeconomics a science? Charles Wolf shows how it is not. "True believers in either policy, which include Nobel Prize winners on both sides," he writes, "discount the results." In other words, the data cannot settle the arguments, which are largely a matter of belief and thus not a science—Q.E.D. But can macroeconomics ever become a science sometime in the future? Mr. Wolf also tells us why it can't: It is a matter of predicting reactions of human beings, whose reactions change in response to the actions based on the predictions. From this, it is easy to see why those who believe that governments and central banks can manage economies will always be disappointed.

Alex J. Pollock
American Enterprise Institute
Washington

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Alex J.
Pollock
  • Alex Pollock joined AEI in 2004 after thirty-five years in banking. He was president and chief executive officer of the Federal Home Loan Bank of Chicago from 1991 to 2004. He is the author of numerous articles on financial systems and the organizer of the “Deflating Bubble” series of AEI conferences. In 2007, he developed a one-page mortgage form to help borrowers understand their mortgage obligations. At AEI, he focuses on financial policy issues, including housing finance, government-sponsored enterprises, retirement finance, corporate governance, accounting standards, and the banking system. He is the lead director of CME Group, a director of Great Lakes Higher Education Corporation and the International Union for Housing Finance, and chairman of the board of the Great Books Foundation.

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