When John Maynard Keynes wrote that “In the long run we are all dead,” he probably didn’t mean a few days or months, notwithstanding a recent “long-term experimental” social psychology study that shows results over a whopping three days. Keynes lived an additional 23 years after publishing his famous statement, so I’ll call 23 years ...
David Evans considers the following as important:
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When John Maynard Keynes wrote that “In the long run we are all dead,” he probably didn’t mean a few days or months, notwithstanding a recent “long-term experimental” social psychology study that shows results over a whopping three days. Keynes lived an additional 23 years after publishing his famous statement, so I’ll call 23 years the “Keynes test” for long-run impacts.
In development economics, how long is the long run? I identified every article in three development economics journals that used the term “long run” in its title. The journals were the Journal of Development Economics, Economic Development and Cultural Change, and the World Bank Economic Review. 38 articles used the term – excluding two book reviews, of which 23 articles had empirical analysis. (It’s easy to talk about long run impacts when you’re only speaking theoretically.) Of those 23, 10 were micro and 13 were macro. So this is a small sample. Proceed with caution!
The median long run across the 23 papers is 32 years, with a median of 26.5 for micro and 34 for macro. So both fields pass the Keynes test; on average. But the distribution is impressive. In micro, studies range from a 3-year long run to a 350-year long run. In macro, studies range from 9 years to 10,000 years.
Not every study has to pass the Keynes test for the long run. The study with the shortest long run looks at the “long-run economic impacts of antiretroviral theory.” When “patients with AIDS will not generally live beyond the next 6–12 months” without treatment, then 3 years – 3 to 6 times the expected remaining lifespan of the population under study – may accurately capture the long run. But another paper uses archeological sites from the Neolithic Revolution, “more than 10,000 years ago” to explain cultural divergence in the modern day.
So remember that the length of the long run may vary dramatically. Carpe diem (for the next 10,000 years)!
- Obviously there are better, more thorough ways to do this analysis. Have at it!
- Andrew Gelman brought the social psychology to my attention on this blog post.
- The famous Keynes quote was in his 1923 publication, The Tract on Monetary Reform. The fuller quote is “But this long run is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task, if in tempestuous seasons they can only tell us, that when the storm is long past, the ocean is flat again.” Keynes passed away in 1946.