That being said, I do find the idea of such a list fascinating and I applaud these anonymous authors for giving it their best effort. I would love to see a survey of, say, the AEA asking members for their lists of top unsolved economics questions.
To say a question is "unsolved" implies that the question potentially has a solution, in the same way 2x + 4 = 8 has a solution. The difficulty is, most of the questions on this list are so vague that they cannot possibly have a solution. As such, the list, in my opinion, is a poor one.
Follows is the list (as of August 12, 2008) and my comments on each:
Top Unsolved Problems in Economics - According to Wikipedia
- What caused the Industrial Revolution?
The Industrial Revolution is one of the most important times in economic history, so ideally we would like to know as much about it as possible. No event has a single cause - the Civil War was not wholly caused by slavery and World War I was not wholly caused by the assassination of Archduke Ferdinand. This is a question without a solution, as events have numerous causes and determining which ones were more important than others naturally involves some subjectivity. - What is the proper size and scope of government?
Another question with no objective answer. People will always have differing views on this because of the subjective weight they put on efficiency vs. equity - even if we managed to fully understand the exact trade-off that was being made in each case. - How can heterogeneous production goods be included in a mathematically trackable intertemporal equilibrium constrution?
This is not a question that particularly interests me, but it may others. It at least appears to be a question that has an objective answer (particularly if you remove the "How").
- What truly caused the Great Depression?
See point 1.
- Can we explain the Equity Premium Puzzle?
This, in my view, is a truly important question. I suspect if you polled economists on unsolved economics problems, this question, in some form, would make most of their top 10 lists. - How is it possible to provide causal explanations using the purely logical constructions of mathematical economics?
I am not sure if I understand the problem here. What would make economics different than, say, physics where we can provide causal explanations (the projectile travelled 440 feet because it was launched at point x from angle y at velocity z, etc. etc.) - Can we create an equivalent of Black-Scholes for futures contract pricing?
I am not a finance guy, but this seems like a solid question.
- What is the microeconomic foundation of inflation?
Is this really an unsolved question? I am not sure if it is, if we treat money such as any other commodity in our economy and as such is subject to the same supply and demand forces. - Is the money supply endogenous?
They follow up with "Mainstream economics claims that it is; post-Keynesian economics claims that it is not." I think there is a good question in here, though I do not think the issue is strictly to do with endogeneity (which, strictly speaking, is a modelling assumption). If the question is properly constructed, I think this could be considered one of the key problems in economics. - How does price formation occur?
This question is so broad it is unanswerable. My academic research is on price formation in oligopolies and even that is so broad that I do not believe you can have a single "solution". - What causes the variation of income among ethnic groups?
An interesting question, but one similar to item #1 in that it is so broad you cannot get a single answer for it. Interesting related questions are what causes the variation of income between any two individuals and what causes some countries to grow faster than others. The last question, in my view, is probably the most important one in economics, though again it seems difficult to find an objective "solution" to it.
