Saturday, May 12, 2018

Jason Smith — Macro criticism, but not that kind

With all the tired and plain wrong critiques of economics out there that are easily shot down by even the most critical student of economics, I thought I'd try my hand at writing at one that might pass muster. I did write a book, but it was more aimed at taking a new direction; this will be a more specific critique.
First, let me avoid the common mistake of using the word "economics" but then exclusively talking about macroeconomics: my critique is being leveled at macroeconomics (macro). This is not to say I don't also have criticisms of microeconomics or growth theory, but rather let me just focus on macro because that is what most people are interested in. I'm pretty sure the comeback "Auction theory is successful!" isn't really going to cut it with the Post Crash Economics Society or in general anyone who's life was turned upside-down by the Great Recession.
Second, let me avoid the common mistake of saying macroeconomists don't think about X. They do. There's a good chance they've thought about X much more than you have. Instead, let me focus on how macroeconomists think about thinking about X — the context, the spoken and unspoken narratives, the institutional knowledge.
And finally, let me avoid the common mistake of decrying the use of math in economics (this time in general). Mathematics is an extraordinarily useful tool. I know — I'm a physicist. I don't think economists have "physics envy", but the charge does carry a nugget of truth that I'll get to later....
Information Transfer Economics
Macro criticism, but not that kind
Jason Smith

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