To fear the engineers that is. It seems like TCA Srinivasa Raghavan had an extremely tight deadline with respect to his analysis of the Raghuram Rajan Report. So, instead of taking on the report, he decides to go after the chief author instead. And he doesn’t even do a good job of this. He goes after the chief author’s educational background (Raghuram is a BTech (elec) from IITD). And proceeds to say that the invasion of engineers into economics has in a way ruined the subject.
I completely agree with Mr. Srinivasa Raghavan’s claim that too much of inference is being made nowadays based on raw data, without any supporting logic. I completely agree that econometrics is being used much more than it normally should be. I completely agree on his statement that inductive logic isn’t very sound (heck, i’ve just finished reading Fooled by Randomness). What all this has to do with economists with an engineering background, I don’t understand.
The main reason for so many engineers working in economics has to do with the best colleges in different disciplines. Thanks in part to Nehru’s emphasis on technology, the level of basic undergraduate education in engineering is significantly superior to that in most other fields in India, including economics. Another thing is that due to Nehru’s emphasis on technology, technology-related education is considered superior to other disciplines in india (it is only incidental that an engineering degree helps you get a better-paying job than other degrees; in fact i think it’s the other way round – IT became so big in india only because of the large number of good engineers here).
The general quality of education in the best engineering colleges (for a bachelor’s) and the best economics colleges is now so vast that with a little bit of training the engineer can easily outperform the economist in a test of basic economics (this can be easily observed observed at IIM that most toppers in economics courses are engineers. Contrast this with the basic accounting courses where CAs hold sway or quant courses where engineers zealously guarded their turf.).Of course there is also a “selection bias” (the “better students” in school typically prefer to do an engineering rather than an economics undergrad).
What is happening today is that the best students at undergraduate level in India, irrespective of their interests, are in engineering colleges. Those whose interest might be in economics end up getting classified as “engineers ruining economics”. It’s as simple as that. And given that engineers are better trained at quantitative methods when compared to “pure economics” it’s only natural that they use more analytical methods. I must admit, however, that a large number of people think more quant is always better than less quant and use their skills too much, and draw conclusions from pure noise. A number of them fall into the trap of using extremely complicated methods while forgetting the basics. However, this has nothing to do with their being engineers. “Pure economists” might exaggerate the use of some other tool.
Oh, and Mr. Srinivasa Raghavan gets on my nerves with his claim that engineers don’t know logic! I can’t fathom how people with an arts background could be better in logic compared to (I can’t say about other branches; so i’m talking about computer science engineers here) people who, in one of their first “core courses” learn about formal logic and fundamentals of logic. This particular statement by Mr. Srinivasa Raghavan may, perhaps, illustrate the lack of clear logical thinking that might plague “pure economists”.