Saturday, February 07, 2009

More Psychologists Needed in Generating Stimulus Plan

The editor of the Harvard Law Record makes a strong plea for more psychologists to be involved in the US Stimulus plan.


The article notes that Robert Shiller and George Akerlof are about to release a book called "Animal Spirits: How Human Psychology Drives the Economy" - we will do a bookclub on that here as soon as I get my hands on a few copies

Its obvious that I, at some level, agree with the basic idea that psychology needs to inform more the debate about economic recovery. But we better start thinking more about what this means. Some of the recent commentaries are in danger of creating a behavioural economics bubble and fall in the very traps talked about in the literature. To me, behavioural economics in our part of the world needs to start having an influence and that needs to start by small-scale behaviourally informed experiments cutting across innovation policy, labour market policy, health reform, education reform and so on. These should be done rigorously and scientifically and should be heavily shaped by the people who will run them on a day-to-day basis but also heavily guided by good scientific practice. Irish policies are currently not approaching this ideal with some noteworthy exceptions. This is one area with huge potential for reform even with straitening economic circumstances.

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