'without recourse to the economist’s toolkit, we cannot even begin to make sense of the current crisis.'
All will probably agree with his assertion that:
'The fault lies not with economics, but with economists. The problem is that economists (and those who listen to them) became over-confident in their preferred models of the moment: markets are efficient, financial innovation transfers risk to those best able to bear it, self-regulation works best, and government intervention is ineffective and harmful. They forgot that there were many other models that led in radically different directions. Hubris creates blind spots.'
And even though many may disagree that:
'Macroeconomics may be the only applied field within economics in which more training puts greater distance between the specialist and the real world, owing to its reliance on highly unrealistic models that sacrifice relevance to technical rigor. Sadly, in view of today’s needs, macroeconomists have made little progress on policy since John Maynard Keynes explained how economies could get stuck in unemployment due to deficient aggregate demand. Some, like Brad DeLong and Paul Krugman, would say that the field has actually regressed.',this last point of his may explain why macro at the intro level had for many become most difficult as it was tough to reconcile the 'newer' macro theory taught without the elegance of 'technical rigor' to the real world the intro students witnessed around them. At least when teaching an advanced course you had the fun associated with elegance....
His article is here.
PS: Was just reading a note by Nicolas Vroussalis ('98) in his θεωρειν blog. Another side, well worth reading (in Greek). 'Η Ένδεια της Σύγχρονης Οικονομικής Ι: Κοινωνική Εξήγηση' and 'Η Ένδεια της Σύγχρονης Οικονομικής ΙΙ: Υποταγή του Περιεχομένου στη Μορφή'.
Post a Comment