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You know post-Keynesianism is just a flavour of dynamic stochastic general equilibrium models, right? Those “strange assumptions” are what distinguishes econom
by barry-cotter 7y ago
You know post-Keynesianism is just a flavour of dynamic stochastic general equilibrium models, right?
Those “strange assumptions” are what distinguishes economics from disciplines whose models are so under specified that they can’t be proven wrong. Economic theory can at least say that if certain assumptions are met some set up is optimal.
- viburnum 7y agoYou mean New Keynesian.
- js8 7y agoNo, it isn't (as viburnum explains, you might have confused it with new-keynesian). Look what Steve Keen does with his Minsky program - that's decidedly not just DSGE flavor, it's a fully dynamic model. I would say distinguishing features of post-keynesian approach are fully dynamical modelling and treating uncertainty differently from risk. Both features go back to Keynes.
- soVeryTired 7y ago> Those “strange assumptions” are what distinguishes economics from disciplines whose models are so under specified that they can’t be proven wrong When an economist sees evidence against the prevailing models, they call it a 'puzzle' and write a paper on it. So then there's one model per puzzle. That doesn't really feel like an approach that allows falsification either.