Economists are a fractious group, but they all want to stay in Europe

The last century is certainly not a catalogue of 100pc success. The Great Depression of the 1930s; the stagflation of the 1970s; the 1981 recession; the unsustainable boom of the late 1980s; the 1990 recession; the 2000s credit boom; the 2008 financial crisis.

But the century also doesn’t look that great for medicine or seismology: countless deaths, and tragic earthquakes not foreseen. However, despite all this misery, we surely feel that we have most to learn about health and plate tectonics from medics and seismologists, who are best placed to improve life for us.

Macroeconomics is hard. That’s why there are macroeconomists. If we had figured out how to manipulate a complex system of 60 million people so that they trade without interruption, economists would be replaced by computers.

We would not have monetary policy committees: we’d have a computer in a protected vault, moving interest rates around according to a rule like that proposed by John Taylor. Unfortunately, we have not got there yet, so the demand for real economist people persists.

But although macroeconomic failures show that our subject is hard, I think we have made lots of progress.

Compare the Great Depression to the financial crisis. In the US, output fell by 30pc to its trough. Following 2008, it fell by 4pc. A lot of factors are at work here. But part of it was about lessons we have learnt in macroeconomics. 

For example, we understand better why a fiscal stimulus works and when it’s beneficial. The support for this in the economics community helped bring about the US fiscal stimulus package of 2009.

Also, we have learnt about monetary policy. We have learnt that money works without its value being pinned to the value of gold. Insights gained by trial and error over this “century of failure” freed central banks this time around to cut rates vigorously and go further, when they hit the floor to interest rates, and do quantitative easing. The great US economists, Friedman and Schwartz, and later, former Federal Reserve chairman Bernanke, concluded that the Fed was complicit in the scale of the Great Depression. Future historians will observe that even if modern central banks were not perfect, the recession following 2008 would have been worse without them.

Compare too the state of understanding about what causes inflation now, with what prevailed in the 1970s. Many maintained on both sides of the Atlantic that inflation was a “cost-push” phenomenon, [I recall well studying it in the 1980s as an undergraduate] and fought it by legislating to stop prices and wages going up.

Now we understand that monetary policy is the tool that both ultimately creates and should be used to control inflation. 

We should not forget that much misery is caused not by us economists, but politicians! The sub-prime crisis that led to the collapse in 2008 was aggravated by political interference in the lending practices of the US state mortgage backers Fanny Mae and Freddie Mac, who were leaned on by the Bush [senior] and Clinton governments to lend to those who could not afford it. The New Deal that helped revive the US economy after the Great Depression was fought by politicians on ideological grounds because it was seen as “socialism”.

Now economists in the UK watch as elements in Corbyn’s Labour party debate undoing lessons we have learnt about the failure of state-run industry and politician-run monetary policy. 

And politicians in Ukip and elements of the Conservative Party refuse to accept research on the economic consequences of migration. These debates have the potential for politicians to inflict future miseries on the economy over the heads of an economic consensus.

The debate over our EU membership feels to me like just such an occasion.

The pessimism about the economics of Brexit derives from the following judgments. That the evidence in the past suggests that increasing trade and openness in goods increases prosperity; openness to migration likewise; that since the hands of monetary and fiscal policy are somewhat tied at the moment, a shock to confidence that might follow a vote to Leave could prove extremely difficult to respond to and its effects propagate many years, if not a couple of decades, out into the future; that the uncertainty over which of many possible Leave trajectories the UK will alight will weigh very heavily on spending and employment.

None of these judgments amounts to predictions that can be taken as certain. But they are made by people who have spent their whole lives sifting through research on questions just like this. And remember that’s all an economist is – not to be thought of as a modern druid inducted via secret rites into a sect. But someone who is paid to think about economics and nothing else.

Put many questions to our signatories and you would probably find that they disagree. What is the best way to do economics? We have quite a few heterodox economists in our list, so they would certainly disagree with the others on that.

Was the Coalition austerity policy right? Our letter’s organisers [myself, Wren Lewis and Levine] have had heated conversations about this. What is the best way to regulate the financial sector? Another area of hot and topical controversy.

But on the question about whether the economy would be better off in or out of the EU, this otherwise disorderly, fractious and argumentative group agrees.

Tony Yates is a professor of economics at the University of Birmingham.