Traditional economists have been concerned with trends in unemployment, national productivity, wages, money supply and trade policy. But observers have noticed a new breed of young economists emerging who are applying mathematical models and behavioural economic theories to a range of social problems.
Using a set of statistical tools and a view of how people respond to incentives, they are helping to define the debate in a variety of issues outside the traditional sphere of economics.
Although many of these scholars avoid promoting a political viewpoint, their work can incite heated debate. Levitt found this out when he searched for an explanation of why the U.S. crime rate decreased so dramatically during the 1990s. His explanation cited the legalisation of abortion in the early 1970s – which reduced the number of unwanted youths.
Source: Jon E. Hilsenrath, In the New Economics, the Economy Has Little to Do With It, Wall Street Journal, April 27, 2001.
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