I wrote previously on the potential relevance of behavioural economics to policy. The programme for the AEA conference this year reveals the extent to which academic economics is attempting to augment traditional models with insights from psychology. Recent popular books such as Nudge by Thaler and Sunstein, Animal Spirits by Shiller and Akerlof and Basic Instincts by the ESRI’s Peter Lunn have served to bring these ideas into the public sphere. Another upcoming book by Akerlof and Kranton attempts to bring the literature they have developed on Economics and Identity more squarely into economic debate (see George Akerlof’s IDEAS page for many of the papers the book is based on). The drive to make economics a more human discipline is discussed briefly here as a positive development by Angus Deaton. Deaton primarily addresses the issue of cognitive biases and there is a growing consensus that information processing limitations should be worked into economic models. However, the challenges posed by integrating constructs from areas such as neuroscience and identity theory are theoretically more fundamental and practically more difficult as they involve languages that most economists simply have never used or considered relevant to their domain. My point in posting this brief post is to encourage people interested in how economics relates to policy to begin to consider these academic influences and what they may imply in Ireland. The economic response to the current recession in Ireland relies in no way at all on any of these new literatures and our approach to training economists and finance professionals has largely remained unaltered by them. A good debate about how seriously we should take these literatures for policy is timely.