NONE of the available survey evidence suggests that the current weak state of the US or European economies is due to firms' concerns about excessive regulations. The reason they are not investing more or producing more is because of the weak state of demand (what else can best be done to improve the state of demand is a separate question). Yes, there is a trade-off, but it seems that it would take a massive reduction in regulatory costs to induce a significant increase in output at current levels of demand. There are doubtless some needlessly costly regulations whose burden on firms should be reduced but that should be a constant effort, not one that is undertaken mainly in downturns.

RANDOMISED trials, in social science no less than in medicine, are highly suitable for evaluating policy interventions that meet three broad conditions:

1. They produce their effects over a relatively short time period, so that results can be observed in time to use the lessons of the study;
2. Resource constraints limit the number of treatments that can be made, so a choice must be made in any case between potential subjects of the intervention;
3. There are no strong prior reasons to favor the particular treatment over plausible alternatives.

There are obviously trade-offs between these criteria: an intervention for which we have strong reasons to suspect has greater efficacy than a placebo can nevertheless be justified if the results of the test will be known quickly; a slower treatment may justify randomisation if its relative efficacy is purely speculative, and so on.

INFLUENCE takes many forms: influence on research, influence on policy, influence on the welfare of the world. I'll discuss the first and the third, leaving the second to other contributors who are closer to policymaking than I am.

It seems strange to say this of a figure who seems to have always been present, but the last decade has seen a stronger influence of Adam Smith on research than ever before. The nature and the causes of the wealth of nations had become an unfashionable research topic until the availability of the Summers-Heston data from the 1990s made it possible to compare wealth internationally and sparked a massive research programme on the reasons why some countries (regions, cities, continents) are rich and others are poor. In the 2000s this has encompassed the influence of institutions in a way that would have fascinated Smith himself. The Adam Smith of "The Theory of the Moral Sentiments" has also seen a comeback in the explosion of research in behavioural economics.

IT'S attractive to think that the route to truth lies through the marketplace of ideas, and that we need therefore to concentrate only on removing barriers to entry in this marketplace. Unfortunately, though, in many respects the marketplace for ideas suffers major market failure, including a very major problem of externalities since ideas compete for a scarce and almost open-access resource which is the limited attention of decision-makers. The market for ideas that are used as inputs into public policy is even more problematic: there are few buyers, often only one, namely a government. And the scarcity of decision-makers' attention means that a limited number of "experts" will command substantial monopoly power in this market. That same scarcity of attention will also mean that the buyers of expertise will give undue credence to unreliable indicators of quality: having a Nobel prize does not testify to someone's good judgment, to their expertise outside the area for which the prize was awarded, or to their intellectual honesty. And many of the buyers of ideas don't even want quality, in the sense of theories that are true: they want theories that look true but advance the buyer's own interests in the wider world. The incentive to produce poor-quality thinking is no less serious than in other monopolised markets for goods with massively asymmetric information about quality.