Read the Classics: "Top Twenty" isn't quite "Truest Twenty," but....

March 10, 2011 5:50 AM

Via the Economist: the top twenty papers from 100 years of the American Economic Review. (This post is mostly pdfs.)

Alchian, Armen A., and Harold Demsetz. 1972. “Production, Information Costs,
and Economic Organization.” American Economic Review, 62(5): 777–95.

Arrow, Kenneth J. 1963. “Uncertainty and the Welfare Economics of Medical
Care.” American Economic Review, 53(5): 941–73.

Cobb, Charles W., and Paul H. Douglas. 1928. “A Theory of Production.” American
Economic Review, 18(1): 139–65.

Deaton, Angus S., and John Muellbauer. 1980. “An Almost Ideal Demand System.”
American Economic Review, 70(3): 312–26.

Diamond, Peter A. 1965. “National Debt in a Neoclassical Growth Model.”
American Economic Review, 55(5): 1126–50.

Diamond, Peter A., and James A. Mirrlees. 1971. “Optimal Taxation and Public
Production I: Production Efficiency.” American Economic Review, 61(1): 8–27.

Diamond, Peter A., and James A. Mirrlees. 1971. “Optimal Taxation and Public
Production II: Tax Rules.” American Economic Review, 61(3): 261–78.

Dixit, Avinash K., and Joseph E. Stiglitz. 1977. “Monopolistic Competition and
Optimum Product Diversity.” American Economic Review, 67(3): 297–308.

Friedman, Milton. 1968. “The Role of Monetary Policy.” American Economic
Review, 58(1): 1–17.

Grossman, Sanford J., and Joseph E. Stiglitz. 1980. “On the Impossibility of
Informationally Efficient Markets.” American Economic Review, 70(3): 393–408.

Harris, John R., and Michael P. Todaro. 1970. “Migration, Unemployment and
Development: A Two-Sector Analysis.” American Economic Review, 60(1): 126–42.

Hayek, F. A. 1945. “The Use of Knowledge in Society.” American Economic
Review, 35(4): 519–30.

Jorgenson, Dale W. 1963. “Capital Theory and Investment Behavior.” American
Economic Review, 53(2): 247–59.

Krueger, Anne O. 1974. “The Political Economy of the Rent-Seeking Society.”
American Economic Review, 64(3): 291–303.

Krugman, Paul. 1980. “Scale Economies, Product Differentiation, and the Pattern
of Trade.” American Economic Review, 70(5): 950–59.

Kuznets, Simon. 1955. “Economic Growth and Income Inequality.” American
Economic Review, 45(1): 1–28.

Lucas, Robert E., Jr. 1973. “Some International Evidence on Output-Inflation
Tradeoffs.” American Economic Review, 63(3): 326–34.

Modigliani, Franco, and Merton H. Miller. 1958. “The Cost of Capital, Corporation
Finance and the Theory of Investment.” American Economic Review, 48(3): 261–97.

Mundell, Robert A. 1961. “A Theory of Optimum Currency Areas.” American
Economic Review, 51(4): 657–65.

Ross, Stephen A. 1973. “The Economic Theory of Agency: The Principal’s
Problem.” American Economic Review, 63(2): 134–39.

Shiller, Robert J. 1981. “Do Stock Prices Move Too Much to Be Justified by
Subsequent Changes in Dividends?” American Economic Review, 71(3): 421–36.

Some things are still unsettled.

No, Kenneth Arrow does not anticipate John Rawls.

posted by anotherpanacea (28 comments total)

The top 20 economics papers over 100 years and only one authored by a woman.
posted by three blind mice at 6:09 AM on March 10, 2011 [2 favorites]

And none by mice.
posted by sutt at 6:13 AM on March 10, 2011 [1 favorite]

only one authored by a woman

I don't disagree with the underlying disparity and bias, but, as someone who's now been around the block a little here, this type of response is completely lacking.

My plan is to take the content here (which is dense and interesting) and try to engage people I know, especially women.
posted by Reasonably Everything Happens at 6:17 AM on March 10, 2011

Calling it now: worst ratio of comments to people who actually read the links ever
posted by sonic meat machine at 6:17 AM on March 10, 2011 [6 favorites]

TBM: also, only one authored after 1970, which likely contributes to the problem. Here are the contemporary great women economists.
posted by anotherpanacea at 6:18 AM on March 10, 2011 [1 favorite]

Err, only one authored after 1980.
posted by anotherpanacea at 6:22 AM on March 10, 2011

this type of response is completely lacking.

Just an observation that women represent less than 5% of the top twenty. It is not clear to me if the reason for this is supply or demand. Are seminal papers by women in the field of economic non-existent or unrecognized? Is it the profession of economics in general or this particular journal in particular that introduces this bias.
posted by three blind mice at 6:57 AM on March 10, 2011

Just an observation that women represent less than 5% of the top twenty.

The most recent paper on the list was published in 1981, so perhaps the field (or this particular journal) has changed in the last 30 years. Maybe? Hopefully? Can anybody who follows the field now comment?
posted by AceRock at 7:05 AM on March 10, 2011

on preview, what anotherpanacea said
posted by AceRock at 7:05 AM on March 10, 2011

Also, I've been listening to the audio recordings of the lectures from Robert Shiller's (author of the most recent paper on the list) course at Yale on financial markets and it is good stuff (full audio, video, and lecture transcripts available).
posted by AceRock at 7:08 AM on March 10, 2011

Thanks, 3BM, that's much more clear.

The issue of women being less represented in academic journals (and tenured positions) has been taken up often, recently here. That includes some good conjecture, but I found the discussion on mefi previously to hit the nail on the head.

Perhaps this is not the thread to have this discussion, although, it's certainly an economic issue of central importance to emerging sociopolitical patterns.
posted by Reasonably Everything Happens at 7:11 AM on March 10, 2011 [1 favorite]

Seminal papers in anything more than fifty years old will tend to be dominated by men because society was and is dominated by men. I do understand why this is a problem, but I don't understand why this is relevant. Why don't you read Anne Krueger's excellent paper and talk about it instead of simply scanning the author's names?

For instance, it's quite clear that Krueger's paper, ostensibly on imports, gives us a model for understanding the role and costs of rent-seeking in many other sectors, for pharmaceuticals to union membership. And so rent-seeking seems bad; and we might suggest it is troubling for the government to institute protections to produce rent-seeking.

But the original rent-seeking was simply tied to a scarce resource: land. How can rent-seeking be avoided so long as there are finite resources? Perhaps the state serves an important role in creating counter-hegemonic rents. This, after all, is part of the justification for intellectual property: creating intellectual rents where previously there were none. And it seems to pay off, though with unfortunate unintended effects. Can we say for certain that the unintended costs will always outweigh the intended benefits? I don't think Krueger can be quite so readily generalized.
posted by anotherpanacea at 7:12 AM on March 10, 2011 [3 favorites]

I am a (male) economics professor. The American Economic Review is perhaps the most elite journal in my profession. In the interest of full disclosure, I should say that a) the chief editor of the AER is my colleague and b) this week a paper of mine was rejected by a (female) editor of the AER.

Female representation in economics is a major area of interest to the economics profession. The AER is put out by the American Economic Association (AEA). The AEA's Committee on the Status of Women in the Economics Profession (CSWEP) has many references on this issue. Disparities between men and women in career outcomes is a major area of economic research, and this literature includes research on gender disparities within the economics profession itself. Women are heavily under-represented within the economics profession, though female representation has increased in the last 30 years. I have not analyzed this in depth, but I suspect the under-representation of women on this list roughly mirrors the under-representation of women in the profession at the time the papers were written.
posted by shshore at 7:24 AM on March 10, 2011 [7 favorites]

The percentage of women doctorates in economics increased from about 7% to 22% or so between 1980 and 2000. The gender gap in economics and other fields has been something lots of academics are interested in.
posted by blahblahblah at 7:24 AM on March 10, 2011

Isn't the current EIC of the AER a woman?
posted by JPD at 7:47 AM on March 10, 2011

Can someone speak on the other issue -- that all of these papers are from before 1980? I understand that in some cases these are fundamentals that will remain valid for a long, long time, but surely changes since the 1980s have altered some of our understandings of economics?

Are these papers remarkable precisely because they have stood the test of time?
posted by Deathalicious at 7:49 AM on March 10, 2011

From this Economist article:

The most recent entry to the top 20 is Robert Shiller’s 1981 paper documenting the excessive volatility of stock prices. Nothing else in the past 30 years made the cut—even though submissions to the AER have swelled in that time and its acceptance rate has plunged. Douglas Bernheim, one of the six pop-pickers, says that each of them would probably have included “at least a couple of more recent papers” on their list. “But as we move from older to younger papers, assessments vary more from person to person.”

Why is this? Mr Bernheim points out that younger papers are less time-tested. Economists can only forecast their worth, and these forecasts are rarely convincing enough to supplant one of the proven classics on the list. According to this view, some recent papers will eventually earn broad admiration. It is simply a question of time.

But perhaps it is also a question of the times. Economics has fragmented in the past 15-20 years, both in subject and technique. No aspect of human behaviour is off-limits and a miscellany of methods are in vogue, adding laboratory experiments, randomised trials and computer simulations to the traditionalist’s blackboard and chalk. Many of the brightest stars in economics parade their scepticism, insisting on how little economists really know (or indeed how little real economics they know). The discipline is more exciting, ingenious and intrepid as a result. But it is also unruly and untidy. Some economists are still patiently adding to a cairn of knowledge. Many are throwing rocks.

It is harder than ever to keep abreast of progress. After running four issues a year for the past 100 years, the AER will this year publish six. The journal has already produced four specialised offshoots. Economics is producing a torrent of research, coursing in all directions. The rivers have overflowed their banks.

posted by AceRock at 7:53 AM on March 10, 2011 [1 favorite]

Also interesting is that while none of the papers are post-1980, only one of them is pre-WWII, and if you throw out the Hayak paper you end up with 18 of the 20 works being from 1955-1980 - or 25 years out of the 100 years of the journal's history.

The fact that the Hayak paper is almost certainly the only one without equations is probably telling for why so little that is considered seminal predates 1955
posted by JPD at 7:56 AM on March 10, 2011 [1 favorite]

JPD: Isn't the current EIC of the AER a woman?

Yes. Robert Moffitt just stepped down and was replaced by Penny Goldberg, who is female.
posted by shshore at 8:20 AM on March 10, 2011

So the cliche is that if you ask two economists a question, you'll get three answers.

Do these papers, in contrast, represent a consensus of economists? Would most economists agree about how well the conclusions of these papers have been demonstrated? Or agree on the extent to which they've been modified or refuted by later studies?

How much more controversial is this list than a similar list of the top twenty papers in chemistry? (I don't mean controversial in the sense of arguing about which papers are more important but controversial in the sense that most chemists would probably have a lot of agreement about whether the conclusions of a given set of twenty landmark papers in chemistry had been demonstrated conclusively or not, or the extent to which they'd been overturned by more recent discoveries. And I don't meant to gloss over disagreements in the field of chemistry, rather try to gauge how economics compares.)
posted by straight at 9:20 AM on March 10, 2011

These papers are mostly important because they get cited, not because they get read. Economists have almost no interest in or care for history, even the history of their own profession
posted by Philosopher's Beard at 9:35 AM on March 10, 2011

Would most economists agree about how well the conclusions of these papers have been demonstrated?

That I don't know, but here are some things that most (PhD-holding American Economics Association-member) economists agree on (source; primary source):

* 90.1 percent disagree with the position that "the U.S. should restrict employers from outsourcing work to foreign countries."
* 87.5 percent agree that "the U.S. should eliminate remaining tariffs and other barriers to trade."
* 85.2 percent agree that "the U.S. should eliminate agricultural subsidies."
* 85.3 percent agree that "the gap between Social Security funds and expenditures will become unsustainably large within the next fifty years if current policies remain unchanged."
* 77.2 percent agree that "the best way to deal with Social Security's long-term funding gap is to increase the normal retirement age."
* 67.1 percent agree that "parents should be given educational vouchers which can be used at government-run or privately-run schools."
* 65.0 percent agree that "the U.S. should increase energy taxes."
* And a strong plurality of of 46.8% believe that the minimum wage should be eliminated
posted by jedicus at 10:55 AM on March 10, 2011 [1 favorite]

Economists have almost no interest in or care for history, even the history of their own profession

Please go ahead and show your statement to be true. Or if you wish, please consider that extreme generalization, such as yours, are as irrelevant as the tought of some of these superficial economists you are referring to.

I'll recommend you reading works from Carlo Maria Cipolla, a prominent italian economics historian, you may find them to be interesting and evidence of the fact economist as a category don't disregard history.

Additionally, consider that economists are among the few who are still interested in moral hazard and in the the principal-agent problem. Behavioral economist are interested into exactly how incentives and disincentives on humans work, and how to address the problem that people don't always behave rationally nor ar they profit maximing entities, or constantly rational when attempting to maximize profit.

Of course, as they are humans, economist are affected by the very kind of incentives that lead, for instance, an engineer to underestimate the quality of cement in a construction, a lawyer to artfully betray his client, anybody to do exactly the opposite of what he is supposed to do; so it comes to little surprise that a particular subset of economists may just _disregard_ or _downplay_ the importance of lessons learned from history (for instance the immanence of moral hazard), possibily because they are to profit from that behavior, such as being hired by some Wall Street firm for rationalizing somehow that having a 1:30 leverage is absolutely safe (while omitting to say "safe for who").
posted by elpapacito at 11:58 AM on March 10, 2011

Economists have almost no interest in or care for history, even the history of their own profession
Please go ahead and show your statement to be true.

Maybe it's more accurate to say that the study of economics (especially at the undergraduate level) in universities is heavily slanted towards quantitative methods and away from historical context.

This has been done without heavy evidence of one method being more effective than the other (at creating predictable economic maxims), showing much of its own process of incentives.
posted by Reasonably Everything Happens at 2:26 PM on March 10, 2011

elpapacito. This is a generalisation that historians of economics and the economy believe to be true. Members of both sub-disciplines have been complaining for decades about the increasing marginalisation of their subjects in economics: i) their virtual disappearance from under-graduate and especially post-graduate teaching programmes and ii) attempts to remove them from "economics" altogether by delisting the history of economics journals from the citation index used for departmental research rankings (and thus hirings).

But I do agree with your point that economists are also economic agents. If we are not supposed to trust governments anymore (thanks to public choice theory), why should we still trust economists?

Deirdre McCloskey, a somewhat outspoken critic of standard economics practices, used to challange economists she thought guilty of hubris by asking "If you're so smart, why aren't you rich?" In the 1980's this could still work, but in recent years there has been an astonishing leap in the personal wealth and incomes of financial economists especially. They're all (including the new behavioural economists) cashing in on their fame and academic authority by taking consultancies, board positions on investment funds and investment banks, etc. I think it is quite clear that economists have worked out how to get rich, but I'm not sure it's because they're so smart. They've simply realised that their professional integrity was worth more to other people than themselves and engaged in a mutually benficial exchange.
posted by Philosopher's Beard at 2:47 PM on March 10, 2011

Maybe it's more accurate to say that the study of economics (especially at the undergraduate level) in universities is heavily slanted towards quantitative methods and away from historical context.

In my experience, a number of young economists-to-be are still looking into quantitative methods as they expect that chances to find a job in finance may be higher and also lead to a lucrative occupation. Unfortunately their approach to history (using as a sample the people I have worked with or talked to)is likely to be limited to analyzing a collection of "old" data used in time-series analysis, for learning how things went on, for instance, in the 18th century, in their opinion, isn't likely to give them a competitive advantage today.

These will be turned into "quants", people who some times are overincensed accountants with some advanced math & statistic experience; actually only a few of the "quants" I have met weren't surprised by the fact that assuming house prices to be a non-decreasing function is patently absurd. Doh, naive!

Yet as Phil Beard anticipated, as economic agents they are not always required to look further into the consequences of their actions (as many people in many other professions), hence they don't necessarily feel compelled to. Yes, they may have realized that it was better to remain agnostic, or to sing the song their sponsor or employer told them they wished to ear, and turn a blind eye to anything else.

Now if economists don't have "a science of their own", but just only heavily "borrow" (and sometimes fail at understanding what they are copying, compounding disasters) from lawyers, mathematicians, engineers, physicologist et al, I wonder: did all economist pick only what they wanted to hear (fit in a normative model) ? If so, why weren't they vocally denounced by other professionals acting as "a category" ( I never heard of, for instance IEEE denouncing economists as unscrupolous, superficial and corrupt).

Why haven't mathematicians, statisticians "as a category", denounced the improper use of statistical instruments and its consequences? And why should economist "as a category" carry all the disapproval, coming from all sides, arising from a mismanaged market?

That's what really irks me - not the fact that a profession is used as a scapegoat (which is despicable in itself) - but the fact that all this noise and bruahah on economist is drowning more articulate discourses and criticism.
posted by elpapacito at 4:16 PM on March 10, 2011

here are some things that most (PhD-holding American Economics Association-member) economists agree on

Those all seem to be professional opinions. I was asking if it could be said of any of these papers that, say, 90% of economists agree that in his 1954 paper, Blah Blah Blah, the great economist Dr. X conclusively demonstrated that Z is true.
posted by straight at 6:35 PM on March 10, 2011

I was asking if it could be said of any of these papers that, say, 90% of economists agree that in his 1954 paper, Blah Blah Blah, the great economist Dr. X conclusively demonstrated that Z is true.

Not...really? Most of the papers are notable because they were the first introduction of a useful, interesting idea or concept, not the last. Krugman's paper (and his related work) won him a Nobel Prize (er, Alfred Nobel Memorial Award) for his work on "new" trade theory. His paper wasn't the last word on the subject, but it's influenced (or at least informed) the economics of international trade enormously since then. Cobb and Douglas didn't define the definitive production function, but they identified one that was both tractable and seemed to explain a lot of things people noticed, and is found in nearly every econ textbook I owned as an undergrad.

Economics has changed a lot in the 100 years the AER has been publishing; part of that is a function of increasing mathematical sophistication, but also because of better access to data and computing power. So it's hard to say that anything is really permanently settled conclusively.
posted by dismas at 10:15 PM on March 10, 2011