A Very Good Insight Into the Group Mind of Economists

Dan Rodrik has a very good post on a fundamental difference in the economist community.

Essentially, it comes down to those who believe that theory as it now exists explains how the economy behaves, and any divergence from the theory as noise, and those who who see the noise as significant to a degree that textbook theory cannot be realistically applied.

Speaking as a non economist, I would see Milton Friedman (he got a Nobel for monetary free market theory) falling in the first category, and Joseph Stiglitz (he got his for his descriptions of how information asymmetry distorts free markets) in the second category.

There is a third category I think that he missed between the "first-best economists" and "second-best economists", those who will revisit their theory on the basis of real world observations, where I would put Keynes, who I admire far more than Friedman.