The Economics Data Revolution Has Growing Pains

By now, most people who read about economics have heard about the empirical revolution in the field. An economist used to be someone who spun theories out of reasonable-sounding assumptions to tell stories about why the world works the way it does. Nowadays, economists still have to understand theory, but their day-to-day work involves combing through data and crunching statistics. As you can see in the chart below, research based on data makes up a growing share of published studies:

The empirical revolution is a good thing -- it will make people take economists more seriously as scientists, and result in fewer nasty surprises for policy makers who in the past might have relied too much on speculative theory.