D. SYKES WILFORD | Hipp Chair Professor of Business and Finance, The Citadel
This review is intended to highlight the major contribution that the new book by Blu Putnam, Erik Norland and K. T. Arasu, titled Economics Gone Astray, has made to our understanding of economics.
A deeper understanding of the role that simplifying assumptions play in economic modeling (and thus the periodic disconnect from reality of the models in practice) is essential if “thinking like an economist” continues to be a badge of respect, not a comment of derision.
The challenges of not appreciating the simplifying assumptions, especially those that involve feedback loops and unintended consequences, are exactly the issues Putnam, Norland, and Arasu are addressing in their book. They learned the hard way in the marketplace not of ideas, but the marketplace of reality. Their experience permeates the book and helps address this fundamental problem that we have in economics.
It is an essential read for those who have an interest in the subject and value how it helps students develop their thinking in a logical manner.