Noahpinion
The equation at the core of modern macro
Noah Smith | Assistant Professor of Finance, Stony Brook University
Tuesday, January 14, 2014
Noah Smith — The equation at the core of modern macro
Noahpinion
The equation at the core of modern macro
Noah Smith | Assistant Professor of Finance, Stony Brook University
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Hi,
I did a piece yesterday in which I list what I view as an even bigger theoretical problem with DSGE macro - the models appear to be stock-flow inconsistent, in that they ignore dividends. If dividend flows are added into the models, the models become trivial - no matter what, the economy is at full employment.
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