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The Computerization of Economics

Computers, Programming, and the Internet in the History of Economics

Editors of the special issue

Marcel Boumans (Utrecht University)

Cléo Chassonnery-Zaïgouche (University of Cambridge, CRASSH)

Pierrick Dechaux (REhPERE)

Francesco Sergi (Université Paris Est Créteil, LIPHA)

Deadline extension

The deadline for submitting extended abstracts is extended to June 1st 2021.

Call for papers

“Change the instruments, and you will change the entire social theory that goes with them” (Bruno Latour)

The use of computers, software, datasets and computer programs, as well as information immediately available on the World Wide Web, has become a daily routine to economists. Even though this state of affairs seemed to have reached a steady path, the boom in availability of large dataset, together with computational capacities to handle them, is now fostering new directions for research, questioning the way empirical and theoretical work should be articulated in the evolving paradigm of economics.

A few decades ago, such technologies were available to only a handful of economists and research centersthose that had access to mainframe computers and mastered the required skills for programming.

The front and back office of early mainframe computers

Image 1000020100000244000001C42CD0EB949FF1AA01.png

“Two men looking at WITCH’s printouts” (1951). WITCH stands for Wolverhampton Instrument for Teaching Computing from Harwell.

Source: Retro delight: Gallery of early computers (1940s-1960s), Blog article, URL: https://www.pingdom.com/blog/retro-delight-gallery-of-early-computers-1940s-1960s/.

Image 100000000000012C000000FC9E00C1A376022379.jpg

“Woman wiring an early IBM computer” taken by Berenice Abbott in 1948.

Source: Identifying the "Early IBM Computer" in a Twitter photo: a 405 Accounting Machine, Blog article, URL: http://www.righto.com/2017/11/identifying-early-ibm-computer-in.html.

Despite this limited access, computing technologies have been instrumental in the development of some fieldsas for instance, input-output analysis, linear programming and planning, the study of dynamic systems via simulation methods (e. g. Adelman and Adelman, 1959; Orcutt, 1960; Cohen and Cyert, 1961; Simon, 1962) and the advent of modern financial economics (Sharpe, 1963).

To present-day economists, in any field, it is simply unthinkable to carry out their research without handling databases, estimation procedures, or model simulations (just to mention a few examples) on their own personal computer; not to mention simply typing papers and presenting results. The daily use of computers, evolving programs, and resources available on the Web have also changed academic and research standards in economics: academic curricula, division of labor and specialization, research strategies, allocation of material resources, representations and visualization of ‘new’ knowledge. This global change in economics is what we would call the “computerization” of economics.

  • 1 With the notable exception of the works on the pioneers of the use of computer methods in economics (...)

“Computerization” of economics designates therefore the historical and social process resulting in qualitative and quantitative changes: not only economists use computers and software for conducting their research activities, but these became a crucial, distinctive, and necessary element of economists’ practices, associated with specific fields of inquiry and skills. So far, whilst this growing importance of computers seems undisputed, neither economists nor historians or philosophers of economics have yet suggested a systematic investigation of computerization with a historical and reflexive perspective.1 Œconomia intends to publish a special issue devoted to historical and epistemological aspects of computerization. The project aims at providing a set of research papers with a large coverage, borrowing to various methodological perspectives on four dimensions of computerization.

  1. Computerization per se is a historical process that needs to become an object of inquiry to historians of economics. The neglect of computerization so far seems related to a certain vision of computerization as a “neutral” process. In this view, computerization is simply the adoption of pre-formatted “tools” that do not fundamentally alter the scope and nature of economics. Such “tools” solely increase “computational power” or “tractability”, i.e. they allow economists to perform the same operations as in the pre-computerization era, only “faster” and at a “lower cost”; computers allow to “incrementally complexify” models, or to handle “more data”. This view also reflects the division of labor within economics where computation programming is relegated to a support task, less prestigious and subordinated to economic theory. This relegation is particularly striking when the gender division of labor is taken into account: most early programmers were women (Light, 1999). So far, only a few contributions have pointed out that computerization was not that “neutral” to economics. For instance, Mirowski (2002) emphasized how computer science renewed economists’ conception of markets as informational processes; Renfro (2009) assessed the challenges of translating econometric theory into software; Backhouse and Cherrier (2017) stressed how the use of computers redefined the frontier between applied and theoretical economics. We think that time is ripe for reflecting on and investigating the computerization of economics as a major and fundamental change.

  2. It seems worth exploring the role played by computerization in creating the conditions for new interactions between academic research, economic policies, business activity, and economic teaching. Three specific areas of economics (macroeconomics, finance, and experimental economics) seem particularly promising for investigating these crossovers. Since its emergence in the 1960s, large-scale macroeconomic modelling was tightly related to the development of adequate programming routines for solving, estimating, and simulating models, so that they can be useful for policy-analysis and forecasting. Naturally, policy-making institutions (notably central banks) but also private businesses (e.g. Wharton Forecasting) played a crucial role in supporting the development of such models. “Computerized” macroeconometric models started then circulating across academia, private businesses, and policy-making institutionsa “market for macroeconometric models” was born (see e.g. Sowey and Hargreaves, 1991). Pioneers in the development of modern finance, such as Harry Markowitz and Eugene Fama, were able to develop their models of efficient asset pricing and market efficiency using computers and software. Their research drew on continuous interaction between the conception of tools and the swift dissemination of those tools within the professional community. As a last example, early experimental economics’ classroom experiments have been supported through the creation of specific software. Such software helped both conducting the experiments, collecting the outcomes, and then analyzing those data; At the same time, this represented possibly the first computerized pedagogical devices.

  3. One must consider that the production and uses of computers and software (in general) are driven by market mechanisms. Consequently, even very specialized software for economists cannot escape considerations about cost, efficiency, design, and competing alternatives. We can therefore study the computerization of economics through the lenses of the strategic interactions between competing softwares, languages, and hardwares. These interactions involve both competing computer or software firms producing and selling for the “market” of economics and, on the other hand, open-source communities developing and disseminating their own software and languages.

  4. Computerization has opened a new era in terms of data availability and analysis. From the perspective of historians of economics (particularly those addressing the history of quantification, as in Desrosière, 2008), recent debates about how “Big Data” would transform the practice of economics (see e.g. Einav and Levin, 2014; Taylor et al. 2014) are simply a further stage of a long process of innovation. A long path led economists from the first punch-carded US census data in 1890, to nowadays big datasets. This involved hardware and software innovations in memory and automation of data collection and recovery. Making computerized data involved rethinking classifications, data collection methods and data coding: this set of practices generates specific effects on the development of applied economics.

The overall purpose of the special issue is to investigate computerization as a process actively shaping (and being shaped by) economics’ theoretical frameworks, empirical techniques, and economists’ distinctive research practices. Contributions to this study of the two-way interaction between economics and computerization could focus on any period (from late 19th century early developments in computer theory until to today) and location (contributions beyond the US case are most welcomed). Contributions can explore any dimension of economics (theorizing, modelling, estimating, communicating and sharing research, teaching and training, …) and any fields of economics. In that sense, the special issue aims at building a systematic, contexts-specific, and broad account of computerization of economics. Furthermore, we encourage contributions that adopt new historiographical methods and innovative sources. The special issue will be welcoming contributions from historians of economics, historians of sciences and technologies, but also reminiscences from economists or computer scientists willing to share a retrospective and reflexive insight into the evolution, along their career, of their practices.

Examples of different topics to tackle the issue of computerization include, but are not restricted to:

  • the history of the development, dissemination and uses of a particular software or language, which entails both “generalist” software used by economists (e.g. Stata, R, Mathlab, Python, Fortran, LaTeX, …) and “specialized” software designed by economists for economists (e.g. TROLL, Autobox, Dynare, Gretel, EPS, Gambit, …);

  • the history of institutions, research groups, or other collective actors who have played a specific role in fostering the use of computers, software or the internet in economics. Examples would include, among others, the RAND corporation, the Dynare community at CEPREMAP, the NetEc project, online discussion forums, the Society for Computational Economics;

  • the methodological and epistemological consequences of the use of computers, software, and the internet; for instance, the evolution of the notion of “replicability” of empirical results;

  • the assessment of individual contributions to the computerization of economics, either by economists or by computer scientists or technical staff;

  • the role of computerization in reshaping specific economic issues, for instance in handling tractability (computational, analytical, or empirical) of a given set of models;

  • the role and place of computers and software in economists’ training, through, for instance, the study of courses, textbooks, or university equipment;

  • the role of the internet in the dissemination of economic research, both across the discipline (for instance, through sharing codes and databases) and towards the general audience (for instance, through social media).

Procedure and timeline

Researchers who would like to be considered for participation in this special issue of Œconomia should submit, via email attachment, the title of their paper, an extended (1,000-1,500 words) abstract, and the affiliations of all authors. This information should be sent to oeconomia@openedition.org by June 1st, 2021 at the latest.

Authors whose contributions are selected by the editors will be notified by June 15th, 2021. Full paper submission is expected by February 15th, 2022.

During late Spring 2022, a workshop will be organized in Paris, where authors will be invited to present and discuss their papers. This event will depend on financial constraints and on the Covid-19 situation.

The normal process of peer review revisions and acceptance of papers is expected to end by Summer 2022 and publication to take place in Fall 2022.

For further information, please contact the editors of the special issue or send a message to oeconomia@openedition.org.

Bibliographie

Adelman, Irma and Frank L. Adelman. 1959. The Dynamic Properties of the Klein-Goldberger Model. Econometrica, 27(4): 596-625.

Backhouse, Roger and Béatrice Cherrier. 2017. “It’s Computers, Stupid!” The Spread of Computers and the Changing Roles of Theoretical and Applied Economics. History of Political Economy, 49(Suppl.): 103-126.

Boumans, Marcel. 1997. Lucas and Artificial Worlds. History of Political Economy, 29(Suppl.): 63-90.

Cheng, Chung-Tang. 2020. Guy H. Orcutt’s Engineering Microsimulation to Reengineer Society. History of Political Economy, 52(Suppl.): 191-217.

Cohen, Kalman J. and Richard M. Cyert. 1961. Computer Models in Dynamic Economics. The Quarterly Journal of Economics 75(1): 112-127.

Desrosières, Alain. 2008. Pour une sociologie historique de la quantification. L’argument statistique. Paris: Presses de l’Ecole des mines.

Einav, Liran, and Jonathan Levin. 2014. Economics in the Age of Big Data. Science 346(6210).

Klein, Judy L. 2016. Implementation Rationality: The Nexus of Psychology and Economics at the RAND Logistics Systems Laboratory, 1956–1966. History of Political Economy, 48(Suppl.): 198–225.

Light, Jennifer S. 1999. When Computers Were Women. Technology and Culture, 40(3): 455-483.

Miroswki, Phillip. 2011. Machine Dreams. Economics Becomes a Cyborg Science. Cambridge: Cambridge University Press.

Morgan, Mary S. 2004. Simulation: The birth of a technology to create «evidence» in economics. Revue d'histoire des sciences, 12(2): 339-375.

Orcutt, Guy H. 1960. Simulation of Economic Systems. American Economic Review, 50(5): 894-907.

Renfro, Charles G. 2009. The Practice of Econometric Theory. An Examination of the Characteristics of Econometric Computation. Berlin: Springer.

Simon, Herbert. 1962. New Developments in the Theory of the Firm, American Economic Review, 52(2): 1-15.

Sowey, Eric and Colin Hargreaves. 1991. Dissemination of Macroeconometric Models. Is a New Era Dawning? Journal of Policy Modelling, 13(4): 599-621.

Taylor, Linnet, Ralph Schroeder, and Eric Meyer. 2014. Emerging Practices and Perspectives on Big Data Analysis in Economics: Bigger and Better or More of the Same? Big Data & Society, 1(2).

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Notes

1 With the notable exception of the works on the pioneers of the use of computer methods in economics such as Guy Orcutt (see Cheng, 2020), as well as the use of computers for simulation methods (see e.g. Klein, 2016). Such subjects have been already covered in recent historical work (including in Œconomia, vol. 10, no. 2). On Orcutt and more generally on simulations, see Morgan (2004); on simulations and the Adelmans, see Boumans (1997). For an appraisal on the history of the relationship between economics and engineering see also the HOPE 2020 Supplement.

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