David Neumark – one of today’s most respected and skilled econometricians who studies the employment effects of minimum-wage legislation – has a superb essay in [Wednesday's] Wall Street Journal on the minimum wage. (gated) Among the reasons for the excellence of Neumark’s work is that he is, in addition to being a master econometrician, also an excellent economist. These two disciplines (econometrics and economics), while complementary to each other, are emphatically not the same. Much of what’s wrong with modern-day economics is that people who master econometrics (in part because their degrees are said to be in “economics”) mistake their knowledge of econometrics for knowledge of economics – despite the fact that many of these econometricians know precious little economics. And no amount of mastery of econometrics can compensate for ignorance of economics.
Here’s a slice from Neumark’s essay:
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