Relevant and even prescient commentary on news, politics and the economy.

The Measured Version of My Screaming

John Quiggin finally makes explicit What Everyone Knows: that the clusterfuck that has been made of Macroeconomics is due largely to an attempt to leverage (insufficiently robust) Microeconomic Theory: the search for a macroeconomic theory founded on (roughly) neoclassical micro, which has been the main direction of macro research for 40 years or so, was […]

The Problem with Macro is Micro

John Quiggin makes the broad case (link fixed). If you are then stuck with trying to present a Grand Unified Field Theory, you will inevitably lose (or, at best, reduce) the importance of all the agglomerations that follow from the presumption that the Rational Actor is the mean performer—ignoring that no one, including the economists […]

It Looks Like a Great House. Why Does the Basement Always Flood?

Come on, guys, somebody take it to the Next Step. Matt Y comes closer than anyone else to getting to the truth of the problem with Macroeconomics. Following Justin FoxSteven Levitt’s summary, Matt asks the next question: So why should it be that “in the current regime, if [macro models] are not meticulously constructed from […]