Can economics stem a drop in interest rates?

Economics in universities is in a spot of trouble. For some time students have been turning away from the subject, first in schools at A level, then in degree applications. Ironically, in an age of economics supremacy, with economic forces pre-eminent in domestic and global affairs, fewer young people are being inspired to learn about what this means. It seems that economics has an image problem.

It was, therefore, with a warm glow that the overdue award of the Nobel Prize to Amartya Sen was greeted by my professional colleagues. The citation was remarkable for its references both to areas of achievement that directly concern a large proportion of the world's population, and to the role of "humanistic values" in Sen's work. The press made much of the contrast with last year's winners - mathematical financial economists who, it was almost gleefully noted, had come unstuck through their links with a US hedge fund. Sen's achievement was to maintain a passionate concern with poverty and famines, while contributing to our objective understanding of such phenomena. Might Sen's prize mark a change of image for economics; even a change of fortune?

The problems of economics are, I believe, only partly of its own making. The word is that the drift away from economics A level reflects its image as difficult and boring. On the first charge, we should make no apology. Economics is a demanding subject and graduates' analytical and problem-solving skills are utilised in a broad range of occupations. Consequently, as an A-level choice, economics probably does lose out to easier options.

But to the charge that economics is less exciting compared with subjects that have grown in stature and interest, such as management or sociology, there may well be a case to answer. For a long time, economics has been accused of being too technical and too mathematical. An academic career in economics can seem off-putting if the prospect is to have to serve an apprenticeship in a branch of applied mathematics before anything one says about the economic world, no matter how subtle or innovative, is taken seriously.

Economics can also seem too proud in its way of thinking. The hard core of neo-classical economics still considers atomistic individuals to be the elementary particles of economic life, but rarely admits to the limitations of the domain in which that assumption is acceptable. Where groups of economists have wanted to see individuals and institutions as moulded by, and evolving within, society, they have had to break away from mainstream economics and develop separate associations.

The image of the professional economist that we see regularly in the media does not help. To the world at large, economists are just pundits on financial affairs, the frequent butt of jokes because they often get it wrong and disagree, but respected nevertheless for their grasp of that mysterious phenomenon, financial capital, and their association with the financial oligarchy. An interviewer once asked me why, being an economist, I was not a millionaire. Foxed and slow-thinking, I mumbled something about the exceptional cases of Keynes and Ricardo, both extremely successful at playing the markets. My interviewer was unimpressed. I would have done better to talk about insider knowledge differing from intellectual knowledge about markets. One can only think that economists are seen by many as prophets of the short term.

This is a shame. Let me not underestimate the importance of financial economic science: a breakdown in financial stability means trouble for everyone, not just well-heeled city workers. The very short term is at once both ephemeral and charged with the potential greatly to effect economic welfare. But economics is a very much broader mode of enquiry. Unlike its TV image, it does not concern itself solely with short-term issues. Economists have added much in recent decades to knowledge about major issues, such as the origins of economic development and the causes of unemployment. Moreover, the subject is progressing. Substantive strides have been taken in the development of economic data, aided by the computer revolution.

Econometric and time-series analysts have refined our understanding of what the data can tell us. The application of game theory has modified some of the more ludicrous claims about the supremacy of markets that used to be made in mainstream economics. At the same time, the growth of evolutionary and institutional economics and post-Keynesianism, and other ways of thinking outside the mainstream, offers the prospect of constructive engagement with other subjects.

Anyone who thinks that economics is now a complete science is surely mistaken and, worse, in for a dull time. As Amartya Sen's work has shown, economics can be an exciting subject. The award is not likely to change the attitudes of young people at a stroke, but at least it acknowledges that it is possible to combine a passion about human affairs with dispassionate social science.

Francis Green is professor of economics at the University of Kent at Canterbury.