Summary: Contemporary Research in Economics

(K. E. Boulding)

The present moment in the history of the growth of economic knowledge might be described by the terms hesitancy and consolidation. We stand somewhat at the end of a "great period" which began in the 1920's, characterized by new theoretical insights and by new developments in the collection and processing of economic information. There was an enormous difference between the economics of 1920 and of 1945; there is much less difference between 1945 and 1958.

Nevertheless there are many points of growth and potential growth.

(1) In economic theory interest has shifted from the problems of "macroeconomics" towards two quite different foci of interest: the theory of the firm, or of the economic behavior unit on the one hand; and the theory of economic development on the other. In the theory of the firm economists have "lost the ball" to the engineers and "operations researchers", who have developed the maximization principle to the point where it is operationally useful and even occasionally valuable to the decision maker. Interest has also shifted to the "decision theorists", working with game theory. In the theory of economic development there has been a lot of interest, mainly because of the pressing practical nature of the problem, but to date no outstanding synthesis.

(2) The development of electronic computers has opened up fields of mathematical and statistical research previously unavailable. Input-output analysis, many-variable macroeconomic models, and computer-simulated economic systems are perhaps the major developments - the first two with a fairly long history, and to date, it must be confessed, somewhat disappointing results: the last as yet untried by many years of experience, but a hopeful and exciting development.

(3) One of the most striking post-war developments has been the rise of specialized information-collecting and processing agencies. Before 1940 it is only a slight exaggeration to say that all economic information, apart from occasional censuses, was a byproduct of some other activity - tax collection, customs duties, and so on. Since that time there has been an increasing amount of resources devoted to the collection of economic information for its own sake; sample surveys of consumer behavior and intentions, surveys of business investment plans, surveys of unemployment; and so on. The cumulative effect of this deposit of information is of increasing importance; it can be compared almost to the expansion of the information system of the physical sciences which came with the microscope and the telescope.

(4) A development which is hard to put a neat fence around but which is nonetheless real and important is the integration of economics with other disciplines, especially in the social sciences. Organization theory, administrative science, economic sociology, economic psychology, all represent research interests which spill beyond the traditional bounds of economics but which are highly relevant to many of its problems. This movement has come more perhaps from the other sciences, reaching out towards economic subject matter rather than from economics reaching out towards new methods and disciplines, but it is important for economics nevertheless.

Intellectual forecasts are even more hazardous than economic forecasts, but perhaps a guess as to where the new frontiers of economic knowledge lie may not be unfruitful. I therefore nominate the following areas of potential fruitfulness: (i) Study of the process of decision making in economic organizations, (Households, firms, government agencies, banks, non-profit organizations) pursued if necessary to the psychoanalytic level. (ii) Study of the whole system of economic information, public and private, with a view to examining its impact on decisions. (iii) Study of the social framework of economic decisions, both in rich and poor countries. What may emerge from this is a much more integrated social science then we now have, in which economic and political decisions and dynamic systems can each be seen as special cases of a more general process.