The Mathematical Revolution in Economics: Factor Flows in the Production of Academics

Abstract

The main theme of this essay is that the mathematical revolution in economics precipitated factor flows in the production of academics, wherein able, if not creative, mathematicians moved into economics to earn large rents. This “technical migration” set in motion a counterproductive path dependency from which the discipline may find it difficult to extricate itself. A secondary theme explores the disparate views of Keynes and Schumpeter on economics as an “exact science” and the role that mathematics should play. The seminal question is not whether mathematics is an important tool for economic analysis, because this is not a debatable proposition, but whether the deification of mathematics has come at too high a cost. This cost includes elevating elegance over substance, discounting the importance of other disciplines, and dissuading gifted undergraduates from pursuing advanced study in economics because they do not aspire to be “mathematicians.” JEL Classifications: A22, A23, B31, B41