Academic scholarship in service of false narratives

Anat Admati has an excellent article that highlights the close links between economic choices and its politics.

In the real world... important economic outcomes are often the consequences of political forces. 

She talks about how economists have contributed to providing the intellectual cover for ideological views which have no evidentiary basis, and about how academics analyse problems on purely technical terms ignoring the political system in which they are located.

This advice to academic scholars is very apt and timely,

Policy involvement, however, requires not only disclosing potential conflicts of interest but, most importantly, scrutinizing research carefully to ensure it is adequate for guiding policy... As a theorist, I know models have unrealistic and sometimes stylized assumptions, yet models can bring important insights, and theoretical and empirical papers that capture key features of the real world can be useful for policy. It takes a big leap of faith, however, and can actually do more harm than good, to claim that models whose assumptions greatly distort the real world are adequate for real-world applications... Applying inadequate economic models to policy in the real world is akin to building bridges using flawed engineering models. Serious harm may follow. We can also enrich our teaching and connect more dots for our students by developing interdisciplinary courses and by bringing out the bigger picture, at least occasionally, in teaching standard courses... If only conflicted experts engage in the process of creating rules, especially on important issues that appear technical and confusing such as accounting standards or financial regulation, we get what Karthik Ramanna calls “thin political markets” and our assumptions about markets are more likely to be false.

This is a cautionary note to economists who peddle counter-narratives on minimum wages, business concentration, widening inequality and so on by pointing to models which support their arguments.

This is a nice list of 34 financial market related claims which have no evidentiary basis, but continue to be part of mainstream narratives.