Nobel Memorial Prizes in economics are given for long-term research, not for economists’ role in current debates, so they don’t necessarily have much bearing on the political moment. You might expect the disconnect to be especially strong when the prize is given mainly for the development of new research methods.
And that’s the case for the latest prize, awarded Monday to David Card, Joshua D. Angrist and Guido W. Imbens, leaders in the “credibility revolution” — a change in the way economists use data to assess theories — that has swept economics over the past generation.
It turns out, however, that the credibility revolution is extremely relevant to current debates. For studies using the new approach have, in many though not all cases, strengthened the argument for a more active government role in addressing inequality.
As I’ll explain, that’s not an accident. But first, what’s this revolution all about?
Economists generally can’t…