Thursday, October 23, 2008

Angry economists (amv)

Economic science has been perverted, economic teachings has been perverted, economic policy has been perverted --- all by politics. To continue down our current path is to reinforce the perverse folly of politics that has threatened the viability of the current economic system. (Peter Boettke)

My main beef with economists is that standard macroeconomics does such a poor job of describing what is going on. The textbooks models are pretty much useless. Where in the textbooks is "liquidity preference" a demand for Treasury securities? Where in the textbooks does it say that injecting capital into banks is a policy tool?

Graduate macro is even worse. Have the courses that use representative-agent models solving Euler equations been abolished? Have the professors teaching those courses been fired? Why not?

I have always thought that the issue of the relationship between financial markets and the "real economy" was really deep. I thought that it was a critical part of macroeconomic theory that was poorly developed. But the economics profession for the past thirty years instead focused on producing stochastic calculus porn to satisfy young men's urge for mathematical masturbation. (Arnold Kling)

But don't worry:

Words ought to be a little wild, for they are the assaults of thoughts on the unthinking. (J.M. Keynes)

For the latter: HT P. Krugman