I won’t bury the lead. Yes I think heterodox pedagogy is critically flawed at least at the popular and undergraduate levels. Yesterday I had the fortune of bearing witness to a exchange between a sociologist and an economist. Both are well published and respected within their respective fields. Predictably, it was a dialogue of the deaf. The sociologist merely inquired why the economist was intent on stripping-out the faintest of pretences of a pluralist education in economics by removing the history of economic thought from the core of his graduate curriculum. The response was
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Ok, so some of the best economists, trained at elite institutions, working for the pinnacle of the of the financial world got it wrong, very wrong. How wrong? Just go ask a Greek citizen. But, of course, we all knew that just by reading the headlines coming out of Greece over the last couple of years. We also knew this because most of the best elite trained economists thought everything was doing swimmingly back in 2006 early 2007.
Why? because they assumed rational expectations and that their models were correct. And when, after the crisis
. . . → Read More: Putting lipstick on the PIIGS: the health of modern macroeconomics
We can perhaps amend an old Ethiopian saying to read “absolutes are for infants and kings”. It is catechism worth remembering when arguing with liberal economists. For theirs is not a just sport. In fact, one should never mix sport with justice. As Berlin said long ago (1958):
Everything is what it is: liberty is liberty, not equality or fairness or justice or culture, or human happiness or a quiet conscience.
Much of the mainstream of the profession has dedicated its intellectual muscular skeletal movements to verifying the proposition that, through one theoretical contortion or the
. . . → Read More: Bullshit in absolutes: or how ‘liberal’* economists argue with themselves
Don’t get me wrong I am really encouraged that Mr. Moffatt took it upon himself to echo what we should all know by now: debt is not the story behind the Euro crisis. And as Mike rightly points out the real story is the rural idiocy of austerity and the absence of control over monetary policy for individual Euro members. To which Mike should have added the lack of a fiscal union within the Euro zone.
But what Mike leaves off in his analysis is not the problem with his note in the Globe. The problem is
. . . → Read More: The real Zombie that won’t die: The Myth of Crowding Out
O.k. I wrote this years ago. Maybe 2003, maybe 2005: And while NKs accept the basic logic of the rational expectations augmented Philips curve (that is, that the NAIRU is semi-fixed in the long run) monetary and fiscal policy can … Continue reading →