How economic models shape the policymaking landscape

At the Prospect, we’re committed to exploring what really makes Washington tick, and what forces at play shape policies that affect the public.

That’s why, for our April print issue, we joined forces with Groundwork Collaborative to investigate the hidden drivers of decisions in Washington: economic policy models. Though these models—from the Congressional Budget Office, the Federal Reserve, and outside analysts like the Penn Wharton Budget Center—hold immense power over what policies get considered, much of the time they are neither dispassionate, comprehensive, or even accurate.

In this special issue, we brought together leading economists, politicians, academics, and reporters to delve into what these models are, how they acquired their agenda-setting power, and what needs to change to make them more useful and to make policy better.

To kick off this series, I wrote an overview of how economic models shape the policy landscape with Rakeen Mabud, Chief Economist at Groundwork Collaborative. We describe how models reinforce, justify, and calcify particular theories of change above others, creating a catalyst for insufficient policy. You can read it here.

Economist Joseph Stiglitz wrote about how popular economic models often get the economy wrong, by making simplifying assumptions about the world that do not take into account observable reality. You can read Stiglitz’s piece here.

We will be rolling out the rest of the issue throughout the next week. Click here to read the entire April 2023 issue as it is released.