Economics gives a good return 1

May 9, 2003

Economics is not as depressing as Alan Shipman makes out ("Dismal return of micro-men", THES, May 2). He argues that economics is too narrow and weighed down by mathematics and statistics. As someone who teaches maths and stats at the London School of Economics as well as doing "big picture" work as an external member of the Bank of England Monetary Policy Committee, I believe economics needs, and does, lots of both.

A vital part of the monetary policy apparatus is the Inflation Report , published quarterly. Among other things, this sets out the MPC forecast for the UK economy and is one of the main mechanisms by which the MPC explains what it is up to. It is widely read by journalists and financial market participants, who rapidly tell the rest of us if they think the MPC is on the wrong track. While no great knowledge of modern technical economics is required to read the report, a substantial quantity of such knowledge is necessary to write it, including maths, stats and "narrowly focused" economic modelling.

To generate the big picture, the heavy technology of modern economics, apparently despised by Shipman, is an absolute requirement.

Demand for technically skilled economists is buoyant. This is reflected by the expanding Government Economic Service and the fact that, as an analysis of the UK Labour Force Survey reveals, men and women with an economics degree earn more than those with a degree in any other major subject, with the single exception of accountancy. Someone must value their economics training.

Stephen Nickell
President Royal Economic Society

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