Lars P. Syll — Keynes vs. ‘New Keynesians’ on unemployment

The final court of appeal for macroeconomic models is the real world, and as long as no convincing justification is put forward for how the inferential bridging de facto is made, macroeconomic modelbuilding is little more than “hand waving” that give us rather little warrant for making inductive inferences from models to real world target systems. If substantive questions about the real world are being posed, it is the formalistic-mathematical representations utilized to analyze them that have to match reality, not the other way around.

To Keynes this was self-evident. But obviously not so to ‘New Keynesians’.

Keynes vs. ‘New Keynesians’ on unemployment
Lars P. Syll | Professor, Malmo University