Tag Archives: Economics

– The models are rubbish. – Don’t be silly. There’s a paper from the 1980s on learning effects. Jo Michell

‘Modern’ macroeconomics — a costly waste of time Commenting on the state of standard modern macroeconomics, Willem Buiter argues that neither New Classical nor New Keynesian microfounded DSGE macro models have helped us foresee, understand or craft solutions to the problems of today’s economies: The Monetary Policy Committee of the Bank of England I was privileged to be a ‘founder’ external member of during the years 1997-2000 contained, like its successor...

Stiglitz and the demise of marginal productivity theory Today the trend to greater equality of incomes which characterised the postwar period has been reversed. Inequality is now rising rapidly. Contrary to the rising-tide hypothesis, the rising tide has only lifted the large yachts, and many of the smaller boats have been left dashed on the rocks. This is partly because the extraordinary growth in top incomes has coincided with an economic slowdown. The...

Romer follows up his critique The one reaction that puzzles me goes something like this: “Romer’s critique of RBC models is dated; we’ve known all along that those models make no sense.” If we know that the RBC model makes no sense, why was it left as the core of the DSGE model? Those phlogiston shocks are still there. Now they are mixed together with a bunch of other made-up shocks. Moreover, I see no reason to be confident about what we will learn if some...

[unable to retrieve full-text content]On The Role Of Economics, Trolley Problem Edition…: Surge pricing is basically the economic version of the trolley problem, so we shouldn’t act like there is a simple “right” answer.

Presented without comment, though I will note that sustained 4 percent growth is fairly unprecedented and I will not be adding my name. Signature Request - Statement by Economists Concerned by Hillary Clinton’s Economic Agenda Dear Fellow Economist, We are asking you to join us and other economists by signing a “Statement by Economists Concerned by Hillary Clinton’s Economic Agenda.” More than 200 economists have already signed the statement, including: Eugene Fama, University of...

Wren-Lewis trivializing Romer’s critique As yours truly wrote last week, there has been much discussion going on in the economics academia on Paul Romer’s recent critique of ‘modern’ macroeconomics. Now Oxford professor Simon Wren-Lewis has a blog post up arguing that Romer’s critique is unfair and wide of the mark in places … Paul’s discussion of real effects from monetary policy, and the insistence on productivity shocks as business cycle drivers, is...

History of Modern Monetary Theory  [embedded content]

Chicago drivel — a sure way to get a ‘Nobel prize’ in economics In 2007 Thomas Sargent gave a graduation speech at University of California at Berkeley, giving the grads “a short list of valuable lessons that our beautiful subject teaches”: 1. Many things that are desirable are not feasible. 2. Individuals and communities face trade-offs. 3. Other people have more information about their abilities, their efforts, and their preferences than you do. 4. Everyone...

Why critique in economics is so important Some of the economists who agree about the state of macro in private conversations will not say so in public. This is consistent with the explanation based on different prices. Yet some of them also discourage me from disagreeing openly, which calls for some other explanation. They may feel that they will pay a price too if they have to witness the unpleasant reaction that criticism of a revered leader provokes....