Tuesday, June 9, 2009

Why macro is nonsense - by Russell Roberts (amv)

Macroeconomics is mostly ex-post storytelling. If you decide the economy is doing badly, it's because we haven't spent enough of the stimulus (HT: Billy). If you think it's doing well, it's because (as some of my friends explain it to me) the stimulus is already working building confidence. No science here.
UPDATE: Nice example from Dave of the "it's already working" story. Notice from the story that it is impossible to distinguish between "Bernanke saved the country" and "the fiscal stimulus saved the country even though we've spent so little." Not science.