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Same goes in economics and a large degree to why Keynes was thrown out by freshwater schools in the 70s. Only to be resurrected lately because the new unified
by parasubvert 11y ago
Same goes in economics and a large degree to why Keynes was thrown out by freshwater schools in the 70s.
Only to be resurrected lately because the new unified models were empirically shown to have little macro predictive power, ie. They were wrong.
- yummyfajitas 11y agoBut the Keynesian macro models similarly have little predictive power. They've failed most of the modern tests which actually distinguish them from monetarism. (There have been several "tests" of Keynesian thinking where Keynesian predictions agree with monetarist predictions, but such tests can't distinguish between the two theories.) Most of the modern shift in economic thinking is based more on fashion than on new information. See, e.g., Scott Sumner on the topic: http://econlog.econlib.org/archives/2014/05/when_ideologies.html http://econlog.econlib.org/archives/2014/05/when_ideologies.... http://econlog.econlib.org/archives/2015/03/ways_of_thinkin.html http://econlog.econlib.org/archives/2015/03/ways_of_thinkin....
- parasubvert 11y agoGood old IS-LM has done fairly well the past decade. I'm not sure what you're saying: that both Keynesianism and monetarism suck, or that there is a debate between two credible schools of thought and an unclear winner?