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For people who are saying "how could economists be so stupid" here is some background: First, economics as a field has somewhat fallen into a trap where people
by yetanotherphd 13y ago
For people who are saying "how could economists be so stupid" here is some background:
First, economics as a field has somewhat fallen into a trap where people are overly focused on models that are analytically tractable. This leads them to use unrealistic models that can be solved with infinite horizons, rather than realistic models with finite horizons.
Second, there is always a limit to how realistic your model can be, so unless there is a strong reason to think that heterogeneity is important in your model, you probably won't include it. In this case it may not have been completely obvious that heterogeneity was really important in analyzing the effects of stimulus.
Finally, most people with economics degrees are about as privileged as people with the same degree level in other fields. So being privileged really cannot explain disagreements between economists and other educated people.