## Course Correction

## Source details

**Canonical URL:** [Course Correction](https://www.imf.org/en/publications/fandd/issues/2021/09/book-review-cogs-and-monsters-diane-coyle)

## Other formats

- [Markdown version](/en/publications/fandd/issues/2021/09/book-review-cogs-and-monsters-diane-coyle/index.md)
- [Structured JSON version](/en/publications/fandd/issues/2021/09/book-review-cogs-and-monsters-diane-coyle/index.json)
- [Bundle manifest](/en/publications/fandd/issues/2021/09/book-review-cogs-and-monsters-diane-coyle/bundle-manifest.json)

## Bibliographic details
- Authors: MARTIN SCHINDLER
- Published: September 2, 2021

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### Overview
- Title reviewed: Cogs and Monsters: What Economics Is, and What it Should Be
- Reviewer: MARTIN SCHINDLER, deputy division chief, IMF Institute for Capacity Development
- Publication: F&D Magazine, September 2021
- Format and price: 272 pp., $24.95
- Read time indicator on page: Less than a minute(0 words) Read
- Note: Opinions expressed are those of the author; they do not necessarily reflect IMF policy.

### Central framing (Cogs and Monsters)
- "Cogs": Criticisms of standard economic models, notably:
  - Stylized nature of models and excessive "mathiness" that can obscure underlying assumptions.
  - The idealization of fully rational agents optimizing complex objective functions.
  - Author’s proposed remedy includes greater tolerance for "theoretical ad-hoc-ery", which the reviewer views as unlikely to enhance model credibility.
- "Monsters": Structural changes in the global economy that challenge existing economic frameworks, including:
  - Complex, evolving financial markets whose vulnerabilities were not foreseen prior to the global financial crisis.
  - Disruptions from COVID-19 that call into question tightly integrated, globally distributed production chains.
  - The digital economy’s measurement and modeling challenges (highlighted as a persuasive point).

### Assessment of specific arguments and examples
- Pareto criterion critique:
  - Coyle laments the Pareto criterion as not useful for policymaking.
  - Reviewer’s counterpoint: Most economists accept policies (e.g., trade liberalization) that create net gains despite distributional losers; the policy failure typically lies in compensation of losers, not the Pareto framework itself.
- Handling of criticisms:
  - The reviewer credits Coyle with distinguishing valid criticisms of the profession from straw-man arguments, while also noting she occasionally constructs straw men of her own.

### Profession-level problems identified
- Entrenched academic and policy networks impeding fresh ideas.
- An aggressive debating culture within the discipline.
- Persistent lack of gender and racial diversity.
- Consequence: These issues absorb attention and may reduce focus on some substantive policy-relevant topics.

### Noted strengths and omissions
- Strengths:
  - Convincing exposition of challenges posed by the digital economy for GDP measurement and economic modeling.
  - Persuasive highlighting of several issues the profession should address in both academia and policy circles.
- Omissions (missing or insufficiently addressed topics):
  - Role of economic policy in addressing climate change.
  - Strategies to make economic growth more inclusive.
  - Implications of increasing automation for the future of work.

### Implicit recommendations and implications for the profession
- Reassess model formulation practices to reduce obscuring "mathiness" while maintaining rigor.
- Improve mechanisms for compensating distributional losers from broadly beneficial policies (e.g., trade liberalization).
- Prioritize inclusion of digital-economy measurement issues in standard macroeconomic and policy toolkits.
- Address internal profession dynamics: open networks to fresh ideas and improve gender and racial diversity.
- Expand focus to pressing policy topics omitted in the book: climate policy, inclusive growth, and automation impacts.

*Source: IMF F&D Magazine page — Course Correction, September 2021*

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## Content in this bundle

- **Book Review: Cogs and Monsters - IMF F&D**
  - [Book Review: Cogs and Monsters - IMF F&D (Markdown version)](/-/media/files/publications/fandd/article/2021/september/book-review-cogs-and-monsters-diane-coyle.pdf.md){rel="alternate" type="text/markdown"}
  - [Book Review: Cogs and Monsters - IMF F&D (PDF)](/-/media/files/publications/fandd/article/2021/september/book-review-cogs-and-monsters-diane-coyle.pdf){rel="external" type="application/pdf"}
- **Corregir el rumbo ● Finanzas y Desarrollo ● Septiembre de 2021**
  - [Corregir el rumbo ● Finanzas y Desarrollo ● Septiembre de 2021 (Markdown version)](/-/media/files/publications/fandd/article/2021/september/es/book-review-cogs-and-monsters-diane-coyle-es.pdf.md){rel="alternate" type="text/markdown"}
  - [Corregir el rumbo ● Finanzas y Desarrollo ● Septiembre de 2021 (PDF)](/-/media/files/publications/fandd/article/2021/september/es/book-review-cogs-and-monsters-diane-coyle-es.pdf){rel="external" type="application/pdf"}
- **Changement de cap**
  - [Changement de cap (Markdown version)](/-/media/files/publications/fandd/article/2021/september/fr/book-review-cogs-and-monsters-diane-coyle.pdf.md){rel="alternate" type="text/markdown"}
  - [Changement de cap (PDF)](/-/media/files/publications/fandd/article/2021/september/fr/book-review-cogs-and-monsters-diane-coyle.pdf){rel="external" type="application/pdf"}
- **Книжное обозрение – Финансы и развитие – Нельзя терять время– сентябрь 2021 года**
  - [Книжное обозрение – Финансы и развитие – Нельзя терять время– сентябрь 2021 года (Markdown version)](/-/media/files/publications/fandd/article/2021/september/ru/book3-ru.pdf.md){rel="alternate" type="text/markdown"}
  - [Книжное обозрение – Финансы и развитие – Нельзя терять время– сентябрь 2021 года (PDF)](/-/media/files/publications/fandd/article/2021/september/ru/book3-ru.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/fandd/issues/2021/09/book-review-cogs-and-monsters-diane-coyle_