Is something really wrong with macroeconomics?

Ricardo Reis

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: While there is much that is wrong with macroeconomics today, most critiques of the state of macroeconomics are off target. Current macroeconomic research is not mindless DSGE modeling filled with ridiculous assumptions and oblivious of data. Rather, young macroeconomists are doing vibrant, varied, and exciting work, getting jobs, and being published. Macroeconomics informs economic policy only moderately and not more nor all that differently than other fields in economics. Monetary policy has benefitted significantly from this advice in keeping inflation under control and preventing a new Great Depression. Macroeconomic forecasts perform poorly in absolute terms and given the size of the challenge probably always will. But relative to the level of aggregation, the time horizon, and the amount of funding, they are not so obviously worst than those in other fields. What is most wrong with macroeconomics today is perhaps that there is too little discussion of which models to teach and too little investment in graduate-level textbooks.

JEL-codes: J1 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2017-04
New Economics Papers: this item is included in nep-lab and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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http://eprints.lse.ac.uk/74332/ Open access version. (application/pdf)

Related works:
Journal Article: Is something really wrong with macroeconomics? (2018)
Working Paper: Is something really wrong with macroeconomics? (2018)
Working Paper: Is Something Really Wrong with Macroeconomics? (2017)
Working Paper: Is Something Really Wrong with Macroeconomics? (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:74332

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