Is a new direction needed in economics?

In recent years, our understanding of economics has changed. Up to the 1970s economic policy was dominant, especially outside the universities. Then the American mathematisation of economics reached Germany and took over entire university faculties. Economic policy as a discipline was pushed aside. What contribution is modern economics now making to help understand current economic-policy problems? Lutz Arnold, University of Regensburg, argues that economics is no more immune to misguided developments than other academic disciplines. However, the fact that only a small portion of current research is to be found in the economic-policy relevant textbooks and that economists did not foresee the current economic and financial crisis is not evidence of a crisis in economics. On the contrary, economics is a theoretical and empirical structure that has been built up over the decades and that continues to develop. Olaf Hübler, University of Hanover, refutes the accusation that economics, being too strongly mathematical and not sufficiently taking into consideration human behaviour, cannot make a relevant contribution to the forcasting, explantion and solving of the crisis. Conjuring up a crisis in economics is a false approach in his opinion. Instead, we should pursue the course we are on of a combined theoretical and empirical approach: "Measurement without theory is just as useless as theory that avoids empirical verification. Heterogeneous behaviour and institutions must be integrated even more strongly in the model-based theoretical analysis. The stimulus that emanates from laws, agreements and historically evolved factors must be examined even more precisely". For Peter Oberender, University of Bayreuth, it is important to improve the international presence of German economists. At the same time, seeing the merits of German Ordungspolitk in the context of intellectual history and also vis-à-vis other approaches to economics should not be viewed as philosophical ballast but can provide useful orientation in the discussion on the border areas of economic analysis. We should welcome a pluralism of methods as "a strength of our own discipline". And Alexander Karmann and Andreas Bühn, Technical University of Dresden, argue that economic research in Germany must continue to open itself, with the goal of attaining international standards.