Arnold Kling

Arnold Kling (Ph.D., M.I.T.) blogs at askblog. He previously blogged at EconLog, worked as an economist for the Federal Reserve System, and was a senior economist for Freddie Mac. He is the author of many books, including Crisis of Abundance: Rethinking How We Pay for Health Care (Cato Institute, 2006)

What's the biggest or most interesting mistake you have ever made as an economist (that you'd care to share), and was there a way to fix it?

I have changed my mind on some important issues. Whether I was mistaken before or now, or both, is to be determined. In graduate school, I believed sticky-price Keynesian economics. Now, I do not believe that any aggregate view of the economy is right. Industries expand and contract all the time, and every once in a while not enough industries are expanding to make up for the contracting ones. The probability that instead I was right before to be a Keynesian is certainly greater than zero.
 
I also once doubted that real trade took place among ancient people. I speculated instead that goods changed location because of marauding. But most archaeologists believe that there really was trade, so I was probably wrong on that.
 
In your opinion, who is the most important economist that most people have never heard of?

My first thought is Fischer Black. You absolutely must read Perry Mehrling's biography of him. If nothing else, you get a sense of what the 1970s felt like, both in the culture at large and in the economics profession. I have learned a surprising amount from biographies of economists. Skidelsky's three-volume biography of Keynes (not the abridged version) helped me to see Keynes as rebelling against Victorianism. That explains why Keynes came to see saving as pathological. David Warsh's Knowledge and the Wealth of Nations (Norton, 2006) is insightful on Romer and Krugman.  

Most people have not heard of James Buchanan, even though he won a Nobel. And even most economists think of him as a one-trick pony, namely Public Choice theory. But his book Cost and Choice (University of Chicago Press, 1969) demonstrates that he thought very deeply about economics. That is a tough book, to put on your list to read someday, but probably not soon.

Charles Kindleberger is important, in my opinion. In Manias, Panics, and Crashes (Basic Books, 1978) he does two important things. One is he explains Minsky, who was too confused to explain himself. Second, he extends Minsky in an important way, by emphasizing "displacement" as a trigger for movements in the Minsky cycle.

Have enough people heard of Hal Varian? He explained more about the economics of the Internet, from its communications architecture (lots of switches, economizing on lines) to the nature of information goods, than anyone else.