Economists Knowingly Publish Papers with Errors

I have documented errors in economics papers and pointed out the arguments for why economists say they can’t do better. In a real science, authors would fix errors others have found before publishing their paper. Not in economics.

In 2001, I became aware of a working paper version of “Equilibrium Welfare and Government Policy with Quasi-geometric Discounting” by Krusell, Kuruscu and Smith (KKS2002). They tried to solve a very difficult problem by linearizing around the steady state, a basic idea often used in macroeconomics. They claim that their method “can be viewed in some respects as a variation on the regular perturbation method described in” my book. I do not appreciate others referring to my work in order to legitimize their flawed attempts to do serious math. In fact, that sentence is the only place where they make any connection with math.

I immediately found substantive errors. In particular, they led the reader to believe that their procedure has unique solutions. I subsequently told both Krusell and Smith that their procedure had multiple, significantly different, solutions. They did not dispute my criticisms. However, the published 2002 version made no mention of my criticisms. I contacted Krusell and asked why the published version did not address my criticisms. In his response (in an email) he agreed that they should have referenced my concerns, but that they made no substantive changes because that would have delayed publication. Also, Krusell did not think that the numerical part of the paper was sufficiently important. Krusell’s response raises a basic question: if the numerical part of the paper was not important then why not just delete it and avoid the problems I pointed out?

The errors were written up in a working paper on solving the problem in KKS (2002). In fact, Krusell and Smith saw my presentation of that paper at the 2005 World Congress. They did not dispute any of my negative comments about the published paper. Krusell claimed that they had fixed the multiplicity problem, but I immediately responded with reasons why that fix was not valid. As far as I know, Krusell never wrote up his proposed fix.

After my presentation was finished, Krusell and Smith continued the discussion. They asked me a question which was one of the most memorable of my career: “Why do you criticize us? We never criticize your work.” It reminded me of the days when I was a TA grading calculus tests. Sometimes I would be in a good mood and give partial credit for a very flawed answer, but then have to endure whiny questions like “Why didn’t I get full credit?” from the ungrateful undergraduates.

Criticism is a natural part of any scientific effort, but it should be respectful and on point. One of my favorite emails from a competitor began “You little [fecal matter]!” I was unhappy with that kind of criticism, and particularly with the word “little”, but I have learned to be entertained by that kind of “criticism”. However, my criticism of Krusell, Kuruscu and Smith was on specific mathematical points, and they have never disputed my claims.

I have always thought that authors were obligated to fix known errors before publishing a paper. Of course, my education was mostly in mathematics — four years as an undergraduate math major, four years as a math PhD student, followed by one year as an economics PhD student. Economists correctly perceive my background. One major economist tells his students that I am a Mathematician and a Monster.

Economists think it is fine to publish work containing false and/or misleading statements. I know of many such cases. This is not a unique event. What was somewhat surprising is that the authors told me how they handled my criticisms, a fact which highlights just how acceptable this practice is.

Notify of

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Inline Feedbacks
View all comments