Thursday, June 26, 2008

Leijonhufvud brings it home (amv)

Take this very short paper seriously: "I conclude that dynamic stochastic general equilibrium
theory has shown itself an intellectually bankrupt enterprise."

I bet that in some years DSGE models will find their way into textbooks on the history of economic thought, side by side with other fads and fashions which could not outlive the good old neoclassical reasoning a la Fisher, Wicksell and Hayek.