Thursday, February 5, 2015
Lars P. Syll — Finding equilibrium
Why conventional macro is a waste of time. Mistaking a special (stylized) case for the general case. Proving that there is a special stylized case where microeconomic theories of the household, firm and market are consistent is unhelpful unless the assumptions are realistic (they are not), and there is is empirical evidence for the theory (there is not). The result is a formalistic exercise that may be interesting from the mathematical vantage but which says nothing that is actually scientific about the world. Time to come down from the clouds and get real as Keynes, Post Keynesians and Institutionalists (and others, too) realized and showed long ago.
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