Thread by @heimbergecon

I am very happy to announce that our paper “The power of economic models: The case of the EU’s fiscal regulation framework” has been published in "Socio-Economic Review" (after years of work on the underlying project). Here is a summary thread /1

doi.org/10.1093/ser/mw…

An ungated version of the paper is available here:
If you want to read the gated paper forthcoming in SER, I am happy to send you the pdf. Just let me know via twitter message or e-mail. /2

researchgate.net/publication/33…

Our paper deals with the impact of economic ideas on political processes and decision-making. Social scientists have largely avoided in-depth model analyses of how technical details matter for political processes, but we argue that the technical stuff can be quite important. /3

We propose a new approach for theorizing how models matter for policy-making. We introduce economic models as conceptual transmission devices between paradigms and policies: models may allow actors drawing on such models to exercise power in political decision-making. /4

We illustrate our theoretical argument by focusing on the Commission’s ‘potential output’ model, which is a core pillar of EU fiscal governance providing estimates of ‘structural deficits’. /5

We combine an analysis of history and content of the model with analysis of policy documents, legal provisions, speeches and interviews. /6

Reforms of the EU's fiscal rules since the crisis have relied more heavily on model-based fiscal estimates. The ‘structural’ deficit, which is estimated based on the Commission’s potential output model, has become a prime object of concern in EU economic policy conflicts. /7

Our paper traces the potential output model’s historical origins and technical specificities, which allows us to analyze the conditions and mechanisms under which this exceptional model has been used by European policy-makers to bring about political outcomes /8

We document that the PO-model translates neoclassical paradigmatic priors into political action; it maps paradigmatic priors onto policy programs, focussing political consultations on the supply-side paradigm, which has supported an agenda of (labor) market deregulation /9

Our paper could also be of interest in the context of the recent debate over “nonsense output gaps” in EU fiscal policymaking, as our analysis enhances our understanding about why and how the Commission’s experts defend the potential output model’s authority against critique /end

cc @RobinBrooksIIF @adam_tooze @AchimTruger @SDullien, @GustavAHorn, @BJMbraun, @DanielaGabor, @cornelban73, @MkBlyth, @bjoern_bremer, @AntonioFatas, @LHaffert, @asociologist, @epopppp, @EkaterinaSvet19, @maxkrahe, @PhilippaSigl