Why People Don't Trust Economists
Many people don't trust economists with policy. Why not?
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Scrolling through X (or Twitter) is generally a mistake. I mostly avoid it, except when I’m posting graphs from my Substack or trying to keep up with Econ Twitter. Even then, I usually rely on summaries from Best of Econtwitter. Still, it’s a useful window into what certain groups believe, even if those views are deeply exaggerated on social media. Over the years, one theme that stands out is a deep distrust of economists, as the tweets below show.
And, of course, many of us have seen the “economics is astrology for men” joke.
In this post, I’m stepping back from my usual research-heavy topics to ask a more fundamental, basic question about economics: why don’t people trust economists?
This distrust not only shows up on Twitter or social media in general, but it also shows up in some surveys. I found a couple of surveys that formalized this distrust. In a 2016 study of a few thousand people, a control group of about 300 adults was asked directly how much they trust economists. About 35% said they “only trust economists a little,” and overall, only 60% expressed any level of trust, compared with 40% who reported some level of distrust. The extreme ends of the question show that 10% “distrust a great deal” while 1% “trust a great deal.”
Another less formal survey from YouGov in the U.K. found that 25% of respondents said they trust economists, while 44% said they do not. Now, the actual applicability of these results to the entire U.K. population is questionable, but they do show that a small portion of people heavily distrust economists.
Where did this distrust come from? There has been limited research in answering this question, so I am going to provide some hypotheses with limited evidence.
People don’t understand what economists do
Economists use different methods to study the impacts of policies on different outcomes, like the impact of tariff increases on prices, or to determine factors that have contributed to trends over time, like the contribution of decreasing technology prices to the decline in workers used to produce things. These questions are often grouped into two “camps”: microeconomics and macroeconomics. At an introductory level, microeconomics considers decisions made by people and businesses in a specific market, while macroeconomics considers decisions made by people making up the economy of a whole country or the world. But at a research level, these “camps” are mainly different sets of tools used to answer questions on local effects or country-level effects.
In particular, economists are interested in identifying causality — whether a policy or change actually caused a certain outcome to happen. For example, minimum wages and inflation in an area might rise at the same time, but that doesn’t mean higher minimum wages necessarily cause this inflation. It could also be that local officials raise minimum wages because prices have already been rising. Economists try to measure the first effect (minimum wage’s impact on inflation) while accounting for factors that relate to the second effect (inflation’s impact on minimum wage increases). In fact, economists try to account for as many other factors that could exaggerate or hide the actual effect of the minimum wage increases on the outcome — inflation here. Doing this well relies on careful logic, statistical tools, testing hypotheses, and extensive peer review from other economists.
People who don’t read economics research — i.e. the vast majority of the population — mostly see news headlines. Those often boil down to two themes: “economists say we should/shouldn’t do this” or “economists were wrong.” Recently, for example, headlines have claimed that economists don’t trust the latest inflation data or that they were wrong about how Trump’s policies would affect inflation expectations.
There are a few problems with these kinds of headlines. First, the economists they quote are sometimes not the people trained to use the tools I described earlier to study policy trade-offs. Second, the coverage usually oversimplifies how economists actually think. And third, they ignore all the other trends happening at the same time. For example, if we raised tariffs and kept everything else in the world the exact same — no other policy changes or secondary reactions to tariffs — then we would expect a shift in supply to increase the prices of the tariffed goods; less people would then want to buy these goods because they are more expensive. But what we don’t see is that, at the same time, tariffs impact business hiring decisions and unemployment, the Federal Reserve responds to these tariffs, people may begin to buy other goods as a substitute, exchange rates may change, and other worldly factors completely unrelated to the tariffs may change.
Although many economic models show that tariffs tend to increase prices and are generally inefficient compared to other taxes, the effect may be smaller or less dramatic in real life than people expect due to the tens to hundreds of other existing factors. That’s why most economists don’t try to make bold predictions about the future. An economist’s main goal is to understand the trade-offs and efficiency of different policies while holding other factors constant, and to assess how those policies affect overall well-being under certain assumptions. In the context of tariffs, that might mean accounting for past trends in unemployment, exchange rates, and inflation.
The Great Recession
This is probably the biggest strike against economics as a field: economists, as a group, failed to foresee the 2008 financial crisis. As simply as I can put it, many banks gave risky mortgages, especially adjustable-rate mortgages, to people who might not be able to repay them and then bundled these mortgages and sold them to other banks or investors as safe assets. Housing prices fell, and many people began to default. Then, the value of assets held by banks that invested in these mortgage-backed securities dropped. There are more complexities to the story, but that is the gist of it.
Of course, macroeconomists didn’t predict the financial crisis. Their main models at the time weren’t built to highlight problems inside financial institutions or to zoom in on the housing market; they weren’t centered around market imperfections or bank incentives. Instead, they were designed to study small ups and downs around a stable economy. Think of it like this: the economy is in a “normal” state, and then something happens, like the Federal Reserve cuts interest rates. These models asked: how do economic output or other parts of the economy respond after a few months or after a few years to that kind of shock? Some models did include banks, known as “financial intermediaries,” but those models weren’t really in the spotlight.
We can almost think about the financial crisis a bit like COVID-19: a super rare event that escalated quickly and caught experts off guard at first. Obviously, there are differences that don’t make this a precise metaphor, and COVID-19 was much more destructive and detrimental. The specific chain of problems that led to the crisis wasn’t built into most macroeconomic models and wasn’t widely understood at the time. Like epidemiologists did with COVID-19, economists, including the Federal Reserve and advisors for fiscal policy, somewhat mitigated the negative effects of the financial crisis once it started snowballing. It is almost impossible to predict the behavior of a once in a lifetime event. Since macroeconomic models were built on post-war data (after the Great Depression) and had largely handled smaller recessions well, they were not well suited to predict the scale of a once-in-a-lifetime shock.
But the failure of economic models to predict the crisis — or how severe it would be — sharply reduced public trust in economists. Monetary policy (policy determined by the Federal Reserve) and fiscal policy (policy determined by Congress and the President) mostly responded after the fact, and these policies arguably made an awful situation less awful. However, people felt the recession’s effects for years. In response, economists became skeptical of their pre-recession models and began building models with banks that better capture problems in the financial system. This research is important for any potential shocks we may face in the future.
Economists don’t always agree on everything
Economists don’t always agree on different policies. There isn’t 100% alignment on policies like minimum wage laws, optimal taxation, how involved the government should be in correcting markets. In fact, a random survey of members of the American Economic Association in 2007 shows exactly were some of these differences lie. These differences are shown below:
These disagreements don’t mean economists’ research is wrong. Often, they reflect different views about how a market works or differences in what’s being studied. Take minimum wage research: there are many papers on how minimum wage hikes affect employment. Some find little to no job loss, while others find clear reductions in employment. But they may be looking at different workers (like teens versus all fast-food workers), different types of businesses (big chains versus small retailers), or using different methods and assumptions, which can lead to different results. The conclusions depend on who is being studied and how they are being studied.
Overall, debates about the minimum wage mostly reflect how much economists think real-world labor markets differ from perfect competition, which is where similar workers at different businesses make the same wage for the same job. If employers have enough labor market power, or the ability to control wages, a higher minimum wage might not reduce employment and could even move the market closer to an efficient outcome. But the amount of labor market power can vary by state and county, which makes this a little complicated. Recent research generally finds that the “optimal” minimum wage is only a little higher than today’s level but lower than $15 an hour.
There also used to be a well-known split within macroeconomics between saltwater and freshwater schools of thought. The labels were literal: saltwater schools were on the East Coast, while freshwater schools were in the Midwest near the Great Lakes.
In simple terms, freshwater models mostly ignored imperfections in the market, which saltwater models emphasized. Freshwater economists used “Real Business Cycle” models that tried to explain the economy with clean, simple logic based on how people make decisions, and these models did a decent job matching overall patterns in overall spending by people and production and investment decisions by businesses. Saltwater economists argued that the data, especially in the short run, showed a messier reality, particularly when it came to how monetary policy from the Federal Reserve affects inflation and unemployment. This divide doesn’t exist today, but the division may have affected the opinions of those who kept up with this debate back in the 1980’s to 2000’s.
We don’t have a clear definition of what an economist is
So what is an economist, exactly? It seems simple. This is just someone who studies some part of the economy, right? The problem is that everyone has a different definition. On the news, “economist” might refer to a business executive with no economics Ph.D., a think-tank analyst, or a Ph.D. economist in academia or government. But these are all completely different positions, and each do different types of work and analyses — some much more surface-level than others.
I asked this as an open-ended question on Substack to see how people define an economist. Many of the first answers focused on what economists do, and some of those descriptions were quite broad:
Arguably, a few of these answers might also apply to people who just enjoy reading economics research, but other answers are more related to what is done in Master’s and Ph.D. degree programs. Then, there was some discussion on the credentials required to be an economist:
Naturally, a lot of people might think of someone with a Ph.D. These responses argue that the credentials definition is a bit more complex than simply requiring a Ph.D. Lastly, there was a good discussion on the types of diverse work economists do:
All of these were great answers, and even I have my own definition: An economist is someone who has years of experience credibly using mathematical and econometric modeling methods to answer questions, and this credibility can come from earning a Ph.D., having peer reviewed work, and/or having work experience using these methods. My definition falls into the credentials section.
However, the core issue is that we don’t share a common definition of “economist,” and many people don’t really see what academic, policy, or consulting economists actually do with mathematical tools. Some economists spend their careers doing careful, data-heavy research to understand the effects of policies or the causes of trends. Other self-proclaimed economists can make big claims based on simple correlations or two lines moving together on a chart, like economic output (Gross Domestic Product) and stock prices moving up together. When those two different voices get lumped together, the field starts to look muddled and less trustworthy.
Partisanship
Over the past decade, trust in academic experts, especially scientists, has become more partisan, contributing to cuts in R&D funding and a more negative view of universities in the past year. There is a great Substack post on this development for scientists. One party began to align itself with scientists. However, this is less clear cut for economists, who face criticism from both sides on a policy-basis. In the research survey I mentioned earlier, though, there is a statistically significant bias against economists by conservatives, meaning the difference between right-wing affiliation and no right-wing affiliation were different enough that it’s unlikely to be random chance. But the actual value of “trust” was based on a survey, so the difference in values itself is hard to interpret.
But economists have also damaged themselves with conservatives here. Paul Krugman, one of the most famous economists, is strongly and openly aligned with liberal politics, which many conservatives find alienating. My first memory of an economist on TV was an infamous clip of Jonathan Gruber, an economist who had influence on Obamacare, saying voters had a “lack of economic understanding.” I am not making claims on the correctness of any ideology, but I do have to wonder if economists should at least present ideas and research in an unbiased and neutral manner, clearly laying out policy trade-offs and what the research actually shows.
What should economists, or those who do rigorous research, do?
Economics research goes far beyond studying taxes, monetary policy, tariffs, or income. There exists a broad range of research on topics like understanding why birth rates are falling, understanding how people are responding to climate change, understanding why entrepreneurs start businesses, or even understanding why some people work more than others. Across all these topics, the focus is on causality, contributing factors, trade-offs, and incentives.
Economists play a prominent role in shaping policy, especially through institutions like the Federal Reserve, but for their work to matter, people and policymakers need to trust them. To trust them, people need to understand what it is economists actually do and what their research says, including the assumptions and trade-offs considered. This is why it’s important to advertise economics research in a clear, unbiased, and accessible way. It’s also why I’ve been writing on Substack over the past 6 months and why I’ll be launching a bigger project I’ve been working on soon.
With that in mind, here are other Substacks that post about economics research:
And more not listed here
Also, here are the winning answers for “How would you define an economist?”
A very simple TL;DR: Many people do not trust economists. This could be for a number of reasons, but I believe the most important reason is that people don’t understand what economists do. Other potential factors include increasing partisanship, economists failing to predict the 2008 financial crisis, and the definition of “economist” being unclear. This is why it is now important for economics research to be advertised in an unbiased and clear way in which people can understand.
This is really an excellent post, Jordan. I agree that economists ourselves have a major responsibility to help people understand what we do and the tools we use.
To add to your discussion, economists also engage in different types of work. Some of our work is descriptive—for example, documenting the current structure of U.S. trade policy, such as which goods face tariffs, at what rates, and how those tariffs have changed over time. Other work is normative, asking what should be done—such as whether the U.S. should impose or remove tariffs in light of goals like consumer welfare, national security, or industrial policy. Finally, there is prescriptive work, which focuses on how to move from what is to what should be—for instance, evaluating alternative tariff designs, transition paths, or complementary policies that could reduce adjustment costs for firms and workers if tariffs are reformed.
Seeing economics through this lens helps clarify that the discipline is not just about abstract models, but about carefully describing reality, debating values and objectives, and offering structured ways to move from one to the other.
Great post! I’ve had a thought for a while that the rise in distrust of economists has coincided with the rise in anti-intellectualism.
Economics as a subject - despite being ideologically captured - has somewhat shaped my thinking in a general sense, and my outlook on things.
Even though I studied finance instead of economics, I still think economists have an important place in the world. They’re the only group of people who provide an explanation for why some countries prosper while others don’t and similar types of questions.
I think there’s a gap between how economists communicate (with jargon) and the economic literacy of the average person. So then I think the question then becomes ‘what role can economists play in improving economic literacy?’