As I've written several times before, I have been highly skeptical of the validity of most of macroeconomics. I wish I had been wrong.
Three things, he said:
- Finance professors have all been working for hedge funds. Their research has been about how to price derivatives and options. In other areas of economics, the research topics are much broader and include policy questions.
- Macroeconomics hasn’t made progress since the 1930s.
- Recommendations what to do about the crisis, even from economics professors, are based on very little they learned in graduate school. They hardly differ from opinions. Listening to his colleagues’ recommendations, he thought they would be backed up by something solid. They weren’t.
Thursday, March 05, 2009
What One Economist Has Learned From the Finanical Crisis