One problem with economics is that it is necessarily focused on policy, rather than discovery of fundamentals. Nobody really cares much about economic data except as a guide to policy: economic phenomena do not have the same intrinsic fascination for us as the internal resonances of the atom or the functioning of the vesicles and other organelles of a living cell. We judge economics by what it can produce. As such, economics is rather more like engineering than physics, more practical than spiritual.--Robert J. Shiller [HT Jeff Bell]
Is the younger generation of economists like Raj skipping some of the big questions of economics because some smaller questions are easier to answer? If so, is that optimal from the standpoint of society as a whole?--Greg Mankiw.
The character of cutting-edge, academic economics has changed during the last few decades. It is not entirely easy to characterize these changes in part because economics is a very large, fast-moving field (and, of course, I pay more attention to philosophers than economists). Even so there can be merit in this simplification: (i) between 1947 and 1970, there was a formal revolution in economics (associated with names like Samuelson, Arrow, Debreu, etc.); this revolution occurred more or less simultaneously with (ii) the development of econometrics (associated with names like Tinbergen, Koopmans, etc.)--many of the people involved interacted with each other at the Cowles Commission. Of these two developments, the first had a more theoretical ethos and the second a more policy oriented focus. (Of course, lots of fields in economics -- development, labor, forestry, agriculture, etc. -- have always been very focused on policy.) With the break-down of the Keynesian consensus in the mid-1970s, policy, "big questions of economics" returned to the center of the discipline's attention.* In the quoted passage above, Shiller's "necessarily" takes the centrality of policy for granted...so much so that most of what is published as "theory" by theoreticians in economics these days has some such policy orientation.**