John T. Harvey — The Nobel Prize And Keeping Economics Real

I wholeheartedly agree with our newest Nobel Laureate. Quite right that a large chunk of mainstream macroeconomics has made itself irrelevant. I’m not sure about the thirty years estimate as my feeling is that it goes back even further, but that’s an academic question. Regardless of when it started, the bottom line is that we are in a terrible place today. Economics graduate students are increasingly avoiding taking specializations in macroeconomics and our discipline was hopelessly ill-prepared to predict or explain the financial crisis.…

It’s kind of hard to understand a crisis that occurs in a sector you don’t bother to model....

If this is the current state of affairs, how can we possibly avoid another breakdown? We can do so by listening to other opinions. This is the one place where I want to disagree with Dr. Romer. He laments on page 20 that there are “few other voices saying what I say.” Actually, there are many others, but they lie outside of the mainstream and thus remain unheard. Mainstream economics has become an extremely closed club, to its (and the general public’s) great detriment....

Forbes — Pragmatic Economics

The Nobel Prize And Keeping Economics Real
John T. Harvey | Professor of Economics, Texas Christian University