Kenneth Arrow and What’s Important

In my considered opinion (with apologies to my MIT colleague Paul Samuelson), Ken Arrow (1921-2017) was the most accomplished economic theorist of the second half of the 20th century. I am especially impressed that he tackled only really important problems. … 
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Settled Macro Theory? More evidence.

We must not forget that, in the Great Recession, prominent central bankers rejected modern macro theory as useless. That was, of course, when useful theory was most needed. Stabilization authorities complained that consensus modeling failed to provide practical guidelines for … 
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Welcome Back Ben, Tim, and Hank

The reemergence of Ben Bernanke, Timothy Geithner, and Henry Paulson (BGP) on the policymaking scene stimulated this post. Their book, Firefighting: The Financial Crisis and Its Lessons (2019), was preceded by a succinct New York Times op. ed., “What We Need … 
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A Third AJE:M Article

Still pursuing my apparent obsession with the most recent issue of the American Economic Journal: Microeconomics, this post looks at a third article, “Behavioral Economics and the Atheoretical Style”. Perhaps surprisingly, I very much liked Ran Spiegler’s piece. It is … 
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The Greatest Economy?

In a recent tweetstorm, Donald Trump returned to his favorite boast: “Today I have, as President, perhaps the greatest economy in history…and to the Mainstream Media, it means NOTHING. But it will!” This post demonstrates his explanation-point promise is best … 
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Fooling The New York Times

Two weeks ago, the Editorial Board of the New York Times joined Donald Trump in criticizing the Federal Reserve for not reducing interest rates. Both contend that lower rates are needed to promote economic growth. The interest rate they are … 
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Another AJE:M Article

Last week’s post illustrates why the mainstream New Keynesian journal, American Economic Journal: Macroeconomics, has since its debut in 2009 failed to explain the most important instability evidence. The core problem is that AEJ:M editors assign top priority to defending … 
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