You read this!

If you’re tired of Sumner (how would that even be possible?) and you suspect Krugman is blowing smoke (totally possible), then read this Altig post about the problems with modern macro (which he calls New Keynesian hence Krugman’s smoke).

Altig works for the Fed so he’s tainted, of course, because “real criticism of the central bank has become a career liability”. Real criticism like this and this and this got those guys fired! Oh wait.

(Seriously, read the Sumner piece, too. It compliments the Altig’s piece in a combination that’s a way more serious critique of macro than Krugman’s.)

7 thoughts on “You read this!”

  1. Yes, this entire business is getting really old really fast. Actually, the entire self-important-critical-review-of-macroeconomics-and-practices thingy was never a good idea in the first place. — Let people just get on with it and so on.

  2. Sumner is on a completely different planet from the one I’m living on. According to his view, there was no problem with the economy at all until late 2008 – no problems with overvalued housing, bank lending, excess leverage, etc. And by his own admission, he is not a mathematical modeler – his mechanism of monetary transmission is the old “excess cash reserves” thought experiment – so I doubt he claims any expertise on the nuances of modern DSGE models.

    What we need is a coherent model for a bank that can fit in with the rest of the macro setup. Old-school Keynesianism has no idea what a bank is either. I’ve got an idea that (hopefully) might be a step in the right direction…

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