Thoughts About the Evolution of Mainstream Macroeconomics Over the Last 40 Years (nber.org)
- Reference: 0177637649
- News link: https://slashdot.org/story/25/05/19/130213/thoughts-about-the-evolution-of-mainstream-macroeconomics-over-the-last-40-years
- Source link: https://www.nber.org/papers/w33802
> This year marks the 40th anniversary of the NBER Macro Annual Conference, founded in 1986. This paper reviews the evolution of mainstream macroeconomics since then. It presents my views, informed by a survey of a number of researchers who have made important contributions to the field. I develop two main arguments.
>
> The first is that, starting from strikingly different positions, there has been substantial convergence, in terms of methodology, architecture, and main mechanisms. Methodology: Explicit micro foundations, explicit treatment of distortions, with, at the same time, an increased willingness to deviate from rational expectations, neoclassical utility and profit maximization. Architecture: The wide acceptance of nominal rigidities as an essential distortion, although with mixed feelings. Mechanisms: The wide nature of the shocks to both the demand and the supply side.
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> The second is that this convergence has been, for the most part, good convergence, i.e. the creation of a generally accepted conceptual and analytical structure, a core to which additional distortions can be added, allowing for discussions and integration of new ideas and evidence, rather than fights about basic methodology. Not everything is right however, with too much emphasis on general equilibrium implications from the start, rather than, first, on partial equilibrium analysis of the phenomenon at hand.
[1] https://www.nber.org/papers/w33802
Huh (Score:2)
Is he speaking English? I think I'm going to need a translation.
Re: (Score:2)
It reads like AI-generated word salad.
Try attending a quantum physicist convention (Score:2)
Do you expect to understand all their jargon? So why do you assume that economics must be understood by the average person?
Re: (Score:2)
> Do you expect to understand all their jargon? So why do you assume that economics must be understood by the average person?
If I attend, no I don't expect to understand all their jargon.
But if one of the speakers is going to come to slashdot to self promote their paper? Then yes, I expect them to ditch their jargon and speak to the larger group.
Re: (Score:2)
"If you can't dazzle them with brilliance [ by, say, making useful predictions with that edifice of theory ], baffle them with bullshit."
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Exactly this. Everything relevant is in Hayek's "The Road to Serfdom"
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Ahh yes, the school of quacks who think gold is a solid currency :)
Also the school of quacks who think supply side is the only solution.
I mean, some Austrians have contributed some, but today, they are just quacks looking to fulfill their corporate masters desires. They basically are nicely paid lap dogs and serfs themselves. They wouldn't bat an eye at mass murder if the price was right and it was economically efficient, as long as it is private interests carrying out the carnage, since free market knows a
Re: Austrian economics (Score:1)
strange way to say absolutely nothing
It's Buzzword Bingo! (Score:2)
And we all lost. our time and some brain cells.
-sort of like 'macro economics' over the past half century.
In Plain English... (Score:3)
I asked ChatGPT to redo this really fugly summary they used here:
> The Evolution of Mainstream Macroeconomics (Plain English Version) The Big Picture
> This paper looks at how economists who study the entire economy (things like inflation, recessions, and unemployment) have changed their thinking over the last 40 years. The key idea: “Economists used to argue a lot about how to model the economy, but now they mostly agree on the basics — and that’s mostly a good thing.”
> 1. Economists Used to Disagree a Lot — Now They're More Aligned
> Over time, economists have reached common ground in three main areas:
> Methodology (How they build models)
>
> Start from how individuals and businesses behave ("microfoundations").
> Include real-world imperfections like taxes, regulation, and irrational behavior.
> Less focus on assuming people are always perfectly rational or predict the future accurately.
> Architecture (Structure of the models)
>
> Most economists now agree that prices and wages don’t change instantly (this is called "nominal rigidity").
> This helps explain real-world issues like booms and recessions.
> Mechanisms (What causes the economy to move)
>
> Economists now accept that "shocks" (surprises) can affect both supply (production) and demand (spending).
> 2. Why This Agreement Is Mostly Good
>
> It gives economists a common foundation to build from.
> Makes it easier to test new ideas and solve real problems.
> Reduces endless debates over the basics of model-building.
> But There’s a Catch
> Sometimes economists try to model the whole economy at once (called "general equilibrium") when it might be smarter to just look at one part of it first ("partial equilibrium"). This can make things more complicated than necessary.
> TL;DR
> Over the last 40 years, economists have stopped fighting over how to model the economy and started agreeing on some key ideas. That’s helped the field grow, even if they sometimes overcomplicate things by trying to explain everything at once.
Compare economics with medicine, not physics (Score:2)
Nobody accuses medicine of being a waste of time because some people are still dying. Yet people make jokes about economics because it doesn't get everything right. There's every reason to believe that the 2008 recession would have been a 1930s level depression if economics hadn't progressed a lot since the 1930s. Let's impose reasonable expectations, and not dismiss all economic insights because they don't cure the disease easily or perfectly.
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TARP? You mean the bazooka in Hank Paulson's pocket that he said he'd never have to use?
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If the practice of medicine was demonstrably shortening lives, then your analogy with the priesthood of macroeconomics would be more apt.
A hangdog Alan Greenspan was forced to admit in front of Congress and the world that the underpinnings of the philosophy he'd used to prop up the worst financial excesses was utter bunk. Economists have provided cover for a system that has consistently screwed the majority of the population for generations, and we see the results in reduced life expectancies, growing ho
I'll also calling (Score:2)
Word salad on this, this is incomprehensible gibberish. Maybe that's what economics is all about.
there's no evolution, only money printing (Score:1)
You don't need this word salad, economics papers that don't even mention the increase in money supply aren't worth the bytes they're stored in
Have we evolved that much? (Score:2)
Well, the last 40 years came after we dropped Keynesian economics due to its inability to explain stagflation. Now, after revisiting Keynesian economics during the plague, we find ourselves heading towards stagflation.
Have we evolved? Like, really?
Failure. (Score:2)
Well this is certainly a wordy way of saying, "Sure, we are helping fuck everything up but everyone should marvel at the efficiency of this downward spiral!"
Anyone else concerned? (Score:2)
Anyone else is concerned about economists that can't do simple math to figure out it's their 39th anniversary?
Re: Anyone else concerned? (Score:3)
This year is their 40th: End Year - Start Year + 1
You may not be counting the initial occurrence.
Re: (Score:2)
> You may not be counting the initial occurrence.
You don't count the initial year in an anniversary calculation. It's their 40th year, but their 39th anniversary.
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That would be the 40th conference which is occurring on the 39th anniversary of the first one.
Last year's conference was correctly labeled: " [1]39th Annual Conference on Macroeconomics, 2024 [nber.org]"
[1] https://www.nber.org/conferences/39th-annual-conference-macroeconomics-2024
Math isn't issue -- it is insight & priorities (Score:2)
As I outlined in 2008: [1]https://www.pdfernhout.net/pos... [pdfernhout.net]
""""
Some comments on the PU Economics department and related research directions from a post-scarcity perspective
The PU economics department, of course, should be abolished as part of this transition. :-)
OK, that will never happen, so it should be at least "strongly admonished" for past misbehavior. :-(
What misbehavior? Essentially, the PU Economics department has taken part in a global effort to build an economic "psychofrakulator". How does a psychof
[1] https://www.pdfernhout.net/post-scarcity-princeton.html#Some_comments_on_the_PU_Economics_department_and_related_research_directions_from_a_post-scarcity_perspective