ABSTRACT OF PAPER
Title: Can correspondence analysis find room in the history of economic thought? Applying it to the theories of central banking.
Author: Tusset Gianfranco
How do economic theories and concepts “live” in everyday language, how are theoretical concepts contextualized in economic policy practices? The current proposal is part of a research program whose overall purpose is to provide possible answers to these questions. In particular, we investigate whether correspondence analysis can enable us to compare the texts (scientific articles, books, etc.) containing economic theories and the texts (speeches, newspapers, etc.) in which such theories and models are proposed, debated, and criticized. Briefly, we intend to analyze the reception and spread of theoretical proposals in order to quantify their impact on the real economy and society. The nature of these tools is exploratory and not probabilistic. In effect, we will first focus on correspondence analysis as a statistical methodology enabling us to generate hypotheses about the practical use of theory, including the reaction of the public and markets to theoretical statements. Only in a subsequent stage of the research will these hypotheses be also tested. The analysis yields a data matrix enabling interpretation of the relationships between row profiles or column profiles containing words and short sentences that refer to theoretical concepts. The treatment of these lexical items gives rise to a graphical comparison between ‘words in theory’ and ‘words in practice’. This method makes it possible to reduce the multidimensionality of the data matrix by transforming data (words) into non-correlated variables and building factorial or semantic axes that constitute ‘point of views’ on the phenomenon observed. These views are contextual, in the sense that they display relationships as they exist simultaneously in a broad corpus of texts by reducing the amount of information in order to show the data in a variety of structural directions. We will ‘test’ this approach on a corpus of speeches delivered by central bankers from 1997 onwards. This corpus will be compared with an analogous corpus containing the main theories on central banking. We expect to shed light on a twofold relation between theory and practice: on the one hand, theory precedes practice, as occurs when notions like bank’s 'independence’ and ‘transparency’ are first developed in the economic literature and then find wide application at global level; on the other, it is the practice that steers economic reflection, in accordance with those authors who claim that monetary policies are independent from theoretical prescriptions.
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