The attack on main-stream alchemy November 30, 2013 at 10:25 pm

The staunch defenses of Simon Wren-Lewis and Paul Krugman worry me a little. I respect both of them, and think that Wren-Lewis in particular is both reasonable and careful in his arguments. But really, doesn’t the idea of rational expectations remind you of transmutation – kinda cool if it was true, but more interesting as an idea that cropped on the way to real science than in itself. So no, economists (specifically, anyone who disagrees with Krugman) aren’t the only problem: it is the risible failure of economists models to be able to make meaningfully accurate predictions about the future and the fact that economists are not embarrassed about this that is a problem too. A little more pragmatism and a little less modelling in frameworks that are mathematically tractable but demonstrably ill-connected with reality wouldn’t hurt…

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