Simon Wren-Lewis — Heterodox and mainstream macroeconomics: a great divide

Prof. Wren-Lewis takes on the great divide — inspired by a scathing post of Lars Syll.

Read it at mainly macro
Heterodox and mainstream macroeconomics: a great divide
by Simon Wren-Lewis | Professor of Economics, Oxford University

My comment there:

I'd say that this hits about right. In my view, economists are playing on the same field with the same rules and the argument is over the refereeing, which one side sees rightly as biased, as you point out. As a result, heterodox economists feel unfairly marginalized and react as might be expected. No surprise there.



The other issues are both methodological and substantial, having to do with stated assumptions and presuppositions that act as hidden assumptions. These issues could be resolved through debate but aren't, and even when they are, heterodox economists complain that the result is often ignored by the mainstream, e.g. the Cambridge capital debates.



Most serious, though, is the heterodox charge that the mainstream doesn't accept counter-evidence and falsification, and cites the failure to foresee the global financial crisis as well as the failure to either explain it n retrospect or propose a fix that works. They also cite evidence that heterodox economists like the late Wynne Godley did predict it, explain it and show how to fix it in terms of his approach to monetary economics.

I am not an economist but I pay attention to economics because it is a policy tool and affects everyone in the world. I am concerned that the mainstream approach, including its marginalization of heterodox approaches, is counterproductive.



I would also add that major challenges to the way of doing the economics that is prevalent are coming from life and social scientists that are concern, like the rest of us, that economics is a failure as a policy tool because it is operating out of an 18th century mindset that doesn't take into account advances in evolutionary science, cognitive science, and behavioral science. 



As a professional philosopher, I am also concerned about the philosophical foundations of economics that shows up as a lack of logical rigor masked by mathematical rigor, and insufficient appreciation and economics is as much social and political philosophy ass it is policy science. I see a lot of the conflict among groups and schools as being philosophically based rather than over scientific disagreements.

UPDATE:

Matias Vernengo comments at Naked Keynesianism here.