No, say Betsey Stevenson and Justin Wolfers in their new bloomberg column.
Infact it is becoming even more important as econs get access to large sets of data and sue their tools to understand the real world:
Many had pronounced the field of economics discredited after the global financial crisis. Instead, it’s in the midst of a revolution. The transformation isn’t a mea culpa, or a knee-jerk reaction to the crisis. Rather, it’s a long-running shift toward a more empirical field, to the study of what hard data can tell us about the way the world really works.
Consider the stream of data you will create today. Your metro card will record what time you caught the train. Your Web browser will note how you go about your job, and how much you procrastinate. A mid-afternoon purchase at Starbucks will reveal your penchant for lattes and the occasional cookie. Your flow of e-mail traffic will trace out your professional and personal networks.
At the same time, computing power has made it extremely easy and cheap to analyze all the data you produce. An economist with a laptop can, in a matter of seconds, do the kind of number crunching it used to take a roomful of Ph.D.’s weeks to achieve. Just a few decades ago, economists used punch cards to program data analysis for their empirical studies.
So what is the kind of research going on with this stream of data?
The result has been a boom in empirical research. For example, Raj Chetty, a professor of economics at Harvard University, has been analyzing decades of tax returns — a total of 6 billion observations — to learn, among other things, how your kindergarten teacher affects your long-term earnings. Roberto Rigobon and Alberto Cavallo, both economists at Massachusetts Institute of Technology’s Sloan School of Management, have built the Billion Prices Project, which provides a daily reading on inflation based on prices from online retailers. In our own recent research, we have analyzed the results of surveys asking millions of people about their happiness.
They say the current state of eco shows great positive signs:
This narrative of progress may be unsatisfying to those who expected renewed humility after the financial crisis. Undoubtedly, it has been an embarrassing few years for the economics profession. Many economists have resorted to very public soul-searching. Others, such as Paul Krugman, offer a narrative in which the field is actually regressing.
Ours is a different story. Technological change has brought opportunities to do economics in a way that our predecessors could only have dreamed about. Those opportunities have, in turn, yielded a field that is more connected to reality. Our hope is that these insights will improve our understanding of the economy and give us a better shot at avoiding the next crisis.
Wolfers was profiled as one of the top young econs who shared his ideas on state of economics. He said the same things back then as well.