Making good economic policy is never a simple matter and is never merely a function of economic understanding. But the art has been badly served, recently, by it technicians. John Kay blames the self-limiting obsessions of technical macro-economics and financial analysis.
For many people, deductive reasoning is the mark of science: induction—in which the argument is derived from the subject matter—is the characteristic method of history or literary criticism. But this is an artificial, exaggerated distinction. Scientific progress —not just in applied subjects such as engineering and medicine but also in more theoretical subjects including physics —is frequently the result of observation that something does work, which runs far ahead of any understanding of why it works…[but] Not within the economics profession.Extract from John Kay — FT.com