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Digital Subscriptions > Prospect Magazine > March 2016 > When economists get it wrong

When economists get it wrong

Lawrence Summers and Robert Gordon both make the same mistake

Last month Prospect published two articles about economic growth by two of the world’s most distinguished economists, Robert Gordon and Lawrence Summers. These reminded me of why, 40 years ago, I decided not to become an academic economist and drop out of the Harvard PhD programme where, as it happens, Summers was my fellow student. Instead of shedding light on business and social realities, academic economists seem to prefer to debate among themselves over the intricacies of statistical methods and largely spurious mathematical models. As the joke most famously made by Ronald Reagan runs, an economist is someone who, when he or she sees something working in practice, then wonders if it works in theory too.

A good example of this intellectual distortion is the question whether technological progress has accelerated or slowed to a crawl. For anyone except economists, the answer is so obvious it is hardly worth debating—technological progress is shooting forward. But Robert Gordon assumes that weak economic statistics are proof that, however much new technology we see around us, progress has slowed down.

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In Prospect’s March issue: Peter Pomerantsev describes the situation in Eastern Europe as the governments of Hungary and Poland turn right. Simon Tilford, from the Centre for European Reform, questions the substance of David Cameron’s EU deal and Philip Collins argues that Jeremy Corbyn is not fit for purpose. Also in this issue: Peter Kellner shows us that we are feeling more optimistic than during the last stages of the last Labour government and Jessica Abrahams explores the sexism of Valentine’s Day. Plus Justice Malala on South Africa and the Prospect Duel asks: "Should all immigrants learn English?"