Ignorance and Economics

Abstract

Ignorance—or the limits in our knowledge, is a major issue in economics. This paper argues that economic policy should be treated as an art and craft, much as engineers do in their own field, and not as a science. This in turn leads to a number of simple rules that could guide methodology in our field, such as understanding our work as that of problem solvers, not truth seekers, and recognizing the ad hoc nature of our models and other heuristics. We would also be well advised to add a fudge factor to our policy recommendations and be more creative in thinking about policy.

Keywords:

• economists
• engineers
• formal models
• ignorance