Comments on: The failure of modern macro http://www.ambrosini.us/wordpress/2009/01/the-failure-of-modern-macro/ Sharpening my knife Wed, 10 Mar 2010 01:09:15 -0800 http://wordpress.org/?v=2.8.6 hourly 1 By: swong http://www.ambrosini.us/wordpress/2009/01/the-failure-of-modern-macro/comment-page-1/#comment-5079 swong Sat, 17 Jan 2009 22:06:54 +0000 http://www.ambrosini.us/wordpress/?p=1033#comment-5079 The existence of good questions, in fact, implies a good foundation of knowledge. Teachers rarely recognize this. The existence of good questions, in fact, implies a good foundation of knowledge. Teachers rarely recognize this.

]]> By: pushmedia1 http://www.ambrosini.us/wordpress/2009/01/the-failure-of-modern-macro/comment-page-1/#comment-5053 pushmedia1 Sat, 17 Jan 2009 17:40:47 +0000 http://www.ambrosini.us/wordpress/?p=1033#comment-5053 I guess, then, THE great achievement of the enlightenment was show us how little we know? It is true that the Church thought we knew everything ("god did it") and science showed otherwise, but I wouldn't say it was THE great achievement. Yeah, we used to think because some dude (Keynes) had a theory and wrote a book (General Theory), we knew how the economy worked. Modern macro gave us an empirical tradition and we started realizing lots of those theories weren't true. That's hardly the absence of knowledge. The existence of questions doesn't necessarily imply the absence of knowledge. We know what we don't know and we have the tools to begin to find answers. Why can't we teach that? I guess, then, THE great achievement of the enlightenment was show us how little we know? It is true that the Church thought we knew everything (”god did it”) and science showed otherwise, but I wouldn’t say it was THE great achievement.

Yeah, we used to think because some dude (Keynes) had a theory and wrote a book (General Theory), we knew how the economy worked. Modern macro gave us an empirical tradition and we started realizing lots of those theories weren’t true. That’s hardly the absence of knowledge.

The existence of questions doesn’t necessarily imply the absence of knowledge. We know what we don’t know and we have the tools to begin to find answers. Why can’t we teach that?

]]> By: Gabriel http://www.ambrosini.us/wordpress/2009/01/the-failure-of-modern-macro/comment-page-1/#comment-5003 Gabriel Sat, 17 Jan 2009 07:43:39 +0000 http://www.ambrosini.us/wordpress/?p=1033#comment-5003 The major achievement of modern macro is to show us how little we know (about the trend, the fluctuations and the big depressions). Neither Bernanke nor Cole&Ohanian can provide you with a model that can quantitatively account for the length of the great depression. Endogenous growth and its flirting with IO and so on have not elucidated trend growth rates and account for the 25x international differences. You can sort of approach fluctuations with your favorite mix of shocks and rigidities or whatnot, but to solve the model you have to have policies are rules but real policy making is not rule-based. -- The policy advice that can come out of these models is what rule is best, but policy makers don't need/want that. The major achievement of modern macro is to show us how little we know (about the trend, the fluctuations and the big depressions).

Neither Bernanke nor Cole&Ohanian can provide you with a model that can quantitatively account for the length of the great depression.

Endogenous growth and its flirting with IO and so on have not elucidated trend growth rates and account for the 25x international differences.

You can sort of approach fluctuations with your favorite mix of shocks and rigidities or whatnot, but to solve the model you have to have policies are rules but real policy making is not rule-based. — The policy advice that can come out of these models is what rule is best, but policy makers don’t need/want that.

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