In this spirited and provocative book, Edward Leamer turns an examinationof the Heckscher--Ohlin framework for global competition into an opportunity toconsider the craft of economics: what economists do, what they should do, and whatthey shouldnt do. Claiming a lifetime relationship withHeckscher--Ohlin, Leamer argues that Bertil Ohlins original idea offeredsomething useful though vague and not necessarily valid; the economists who latertranslated his ideas into mathematical theorems offered something precise and validbut not necessarily useful. He argues further that the best economists keep formaland informal thinking in balance. An Ohlinesque mostly prose style can let in faultythinking and fuzzy communication; a mostly math style allows misplaced emphasis andopaque communication. Leamer writes that todays model- and math-driven economicsneeds more prose and less math. Leamer shows that the Heckscher--Ohlin framework isstill useful, and that there is still much work to be done with it. But he issues acaveat about economists: What we do is not science, its fiction andjournalism. Economic theory, he writes, is fiction (stories, loosely connectedto the facts); data analysis is journalism (facts, loosely connected to thestories). Rather than titling the two sections of his book Theory and Evidence, hecalls them Economic Fiction and Econometric Journalism, explaining, If youfind that startling, thats good. I am trying to keep you awake.
