Article Contentsp. [29]p. 30p. 31p. 32p. 33p. 34p. 35p. 36p. 37p. 38p. 39p. 40p. 41p. 42p. 43p. 44p. 45p. 46Issue Table of ContentsThe Journal of Economic Perspectives, Vol. 20, No. 4 (Oct., 2006), pp. 1-250Volume InformationFront MatterSymposium: Macroeconomic LessonsModern Macroeconomics in Practice: How Theory Is Shaping Policy [pp. 3-28]The Macroeconomist as Scientist and Engineer [pp. 29-46]Symposium: The EuroThe Real Effects of European Monetary Union [pp. 47-66]The European Central Bank, the Euro, and Global Financial Markets [pp. 67-88]Interview with Robert A. Mundell [pp. 89-110]Avoiding Invalid Instruments and Coping with Weak Instruments [pp. 111-132]The Homecoming of American College Women: The Reversal of the College Gender Gap [pp. 133-156]The London Congestion Charge [pp. 157-176]How Richard Nixon Pressured Arthur Burns: Evidence from the Nixon Tapes [pp. 177-188]What Has Mattered to Economics since 1970 [pp. 189-202]FeaturesMarkets: The U.S. Lodging Industry [pp. 203-218]Policy Watch: Examining the Justification for Residential Recycling [pp. 219-232]Recommendations for Further Reading [pp. 233-240]CommentsErratum: Cognitive Reflection and Decision Making [p. 241-241]Notes [pp. 243-245]Back MatterAmerican Economic AssociationThe Macroeconomist as Scientist and EngineerAuthor(s): N. Gregory MankiwSource: The Journal of Economic Perspectives, Vol. 20, No. 4 (Oct., 2006), pp. 29-46Published by: American Economic AssociationStable URL: http://www.jstor.org/stable/30033682Accessed: 15/01/2009 16:44Your use of the JSTOR archive indicates your acceptance of JSTOR's Terms and Conditions of Use, available athttp://www.jstor.org/page/info/about/policies/terms.jsp. JSTOR's Terms and Conditions of Use provides, in part, that unlessyou have obtained prior permission, you may not download an entire issue of a journal or multiple copies of articles, and youmay use content in the JSTOR archive only for your personal, non-commercial use.Please contact the publisher regarding any further use of this work. Publisher contact information may be obtained athttp://www.jstor.org/action/showPublisher?publisherCode=aea.Each copy of any part of a JSTOR transmission must contain the same copyright notice that appears on the screen or printedpage of such transmission.JSTOR is a not-for-profit organization founded in 1995 to build trusted digital archives for scholarship. We work with thescholarly community to preserve their work and the materials they rely upon, and to build a common research platform thatpromotes the discovery and use of these resources. For more information about JSTOR, please contact [email protected] Economic Association is collaborating with JSTOR to digitize, preserve and extend access to TheJournal of Economic Perspectives.http://www.jstor.orgJournal of Economic Perspectives-Volume 20, Number 4-Fall 2006-Pages 29-46 The Macroeconomist as Scientist and Engineer N. Gregory Mankiw Economists Economists like to strike the pose of a scientist. I know, because I often do it myself. When I teach undergraduates, I very consciously describe the field of economics as a science, so no student will start the course thinking that he or she is embarking on some squishy academic endeavor. Our colleagues in the physics department across campus may find it amusing that we view them as close cousins, but we are quick to remind anyone who will listen that economists formulate theories with mathematical precision, collect huge data sets on individ- ual and aggregate behavior, and exploit the most sophisticated statistical tech- niques to reach empirical judgments that are free of bias and ideology (or so we like to think). Having recently spent two years in Washington as an economic adviser at a time when the U.S. economy was struggling to pull out of a recession, I am reminded that the subfield of macroeconomics was born not as a science but more as a type of engineering. God put macroeconomists on earth not to propose and test elegant theories but to solve practical problems. The problems He gave us, moreover, were not modest in dimension. The problem that gave birth to our field-the Great Depression of the 1930s- was an economic downturn of unprec- edented scale, including incomes so depressed and unemployment so widespread that it is no exaggeration to say that the viability of the capitalist system was called into question. This essay offers a brief history of macroeconomics, together with an evalua- tion of what we have learned. My premise is that the field has evolved through the efforts of two types of macroeconomists-those who understand the field as a type of engineering and those who would like it to be more of a science. Engineers are, first and foremost, problem solvers. By contrast, the goal of scientists is to under- SN. Gregory Mankiw is the Robert M. Beren Professor of Economics, Harvard University, Cambridge, Massachusetts.30 Journal of Economic Perspectives stand how the world works. The research emphasis of macroeconomists has varied over time between these two motives. While the early macroeconomists were engineers trying to solve practical problems, the macroeconomists of the past several decades have been more interested in developing analytic tools and estab- lishing theoretical principles. These tools and principles, however, have been slow to find their way into applications. As the field of macroeconomics has evolved, one recurrent theme is the interaction-sometimes productive and sometimes not- between the scientists and the engineers. The substantial disconnect between the science and engineering of macroeconomics should be a humbling fact for all of us working in the field. To avoid any confusion, I should say at the outset that the story I tell is not one of good guys and bad guys. Neither scientists nor engineers have a claim to greater virtue. The story is also not one of deep thinkers and simple-minded plumbers. Science professors are typically no better at solving engineering problems than engineering professors are at solving scientific problems. In both fields, cutting- edge problems are hard problems, as well as intellectually challenging ones. Just as the world needs both scientists and engineers, it needs macroeconomists of both mindsets. But I believe that the discipline would advance more smoothly and fruitfully if macroeconomists always kept in mind that their field has a dual