Noah Smith’s conclusion sums up the state of macroeconomics:
After the financial crisis, a bunch of people realised how little macroeconomists do know. I think people are now slowly realising just how little macroeconomists can know. There is a difference.
Read more at Why Macroeconomics Doesn’t Work Very Well | Business Insider Australia.
This column by Alan Kirman highlights the problem with macroeconomics today:
The simple question that was raised during a recent conference organised by Diane Coyle at the Bank of England was to what extent has – or should – the teaching of economics be modified in the light of the current economic crisis? The simple answer is that the economics profession is unlikely to change. Why would economists be willing to give up much of their human capital, painstakingly nurtured for over two centuries?
…….rather than making steady progress towards explaining economic phenomena professional economists have been locked into a narrow vision of the economy. We constantly make more and more sophisticated models within that vision until, as Bob Solow put it, “the uninitiated peasant is left wondering what planet he or she is on” (Solow 2006).
