Expanding Economics

One of the most encouraging trends of modern economics is its expansion to cover topics that are close to other social or other scientific disciplines. In the past, these trends were associated to economic imperialism, but more recently economists accept the importance of being influenced by other disciplines. The trend is most clear in the evolution of public economics or political economy. In public economics, from a sub-discipline being dominated by tax and expenditure theoretical issues, nowadays it focuses more on empirical work that takes a more micro approach and that accepts the importance of bounded rationality in the frontier between psychology and economics (behavioral economics). This evolution can be observed in an empirical analysis of papers covered by the National Bureau of Economic Research in the recent past. Another sub-discipline that is evolving from a simplistic interaction between politics and economics towards more complex and interesting issues is political economy. Today, it has also expanded to cover issues about the importance of culture and history, as explained by Alesina also for a recent NBER survey. A fascinating example of this incursion of political economy in the territory of history is a paper that shows that the density of civic movements and associations in Germany contributed to the rapid expansion of the Nazi Party. The quantitative methods of modern economics provide the best service when they are associated to topics of a moral dimension.