Has Economic Science Stagnated?

Ask a group of economists what the leading academic journal in economics is, and an overwhelming majority will say the American Economic Review. The Review is 100 years old this year and the lead article in the February 2011 issue, co-authored by six well-respected academic economists, is titled “100 Years of the American Economic Review: The Top 20 Articles.”

First, I am happy to say that my very favorite article ever published in the Review, “The Use of Knowledge in Society,” by Friedrich Hayek, which appeared in 1945, made the list.

The oldest article in the list is the 1928 article by Charles W. Cobb and Paul H. Douglas, “A Theory of Production,” which all economists will recognize. It took 18 years before the first of the top 20 articles was published.

What really struck me is that the most recent article on the list, Robert J. Shiller’s “Do Stock Prices Move Too Much to Be Justified by Subsequent Changes in Dividends?” appeared in 1981, 30 years ago! In a journal just 100 years old, no articles in the past 30 years made the list of the 20 top articles.

Is this a sign that economic science is stagnating? Another possibility is that despite its reputation, the most important advances in economic science now appear in other journals. Here is an excellent article by Meir Kohn, Dartmouth economist, who offers a critical analysis of modern economic theory, which is consistent with the hypothesis that economic science is stagnating.

Kohn does see signs of advancement in economics, but outside the mainstream paradigm. If articles published in the American Economic Review represent the mainstream, the authors of the “Top 20” article would have to conclude that if significant advances in economic science have taken place in the past 30 years, they haven’t been published in the profession’s most prestigious journal.