After reading Blanchard’s (2008) “The State of Macro” (NBER WP 14259) and after listening a leading Brazilian mathematical economist talk about the major developments in this area after World War II, I realized how pervasive is the use of Kuhn’s notion of scientific revolutions among practicing economists (and there are many other examples of such use). I started wondering why.
Both Blanchard, who wants to explain the consensus view of fluctuations and of methodology that emerged in recent macro, and the mathematical economist were making an overview of their fields. Such overviews are natural invitations for talking about past and future developments. And here the notion of a revolution pops up often.
The notion that there are competing “paradigms” at certain points and that one becomes central during “normal” times, and that “revolutions” mark the passage from one paradigm to another, may sound very close to a Darwinian competition of theories for practicing economists. Here, the gist is the role played by “facts” in helping scientists abandon “wrong” theories. I felt that this was implicit in both Blanchard’s analysis and that of the mathematical economist. For instance, Blanchard (p. 2, emphasis added) writes:
The theme [of this paper] is that, after the explosion (in both the positive and negative meaning of the word) of the field [macroeconomics] in the 1970s, there has been enormous progress and substantial convergence. For a while–too long a while–the field looked like a battlefield. Reserarchers split in different directions, mostly ignoring each other, or else engaging in bitter fights and controversies. Over time however, largely because facts have a way of not going away, a largely shared vision both of fluctuations and of methodology has emerged. Not everything is fine. Like all revolutions, this one has come with the destruction of some knowledge, and suffers from extremism, hearding, and fashion. But none of this is deadly. The state of macro is good.
Besides the affinity between this interpretation of Kuhnian revolutions and a competitive market of ideas, there is yet another role for using the notion of a revolution by practicing economists: revolutions come with clearly identified winners (no care for losers!), as Lucas over “Keynes”, and DSGE (Dynamic Stochastic General Equilibrium) models over RBC or the first generation of New-Keynesian models, etc.
I will let the others enlighten me about how often Kuhn’s ideas are used by other practicing scientists (and why?).