Economist writes about a criticism of modern new-keynesian macroeconomics from Mark Thoma that
This is a very sensible criticism that is subject to a fairly predictable—and likewise sensible—response: if we throw out the models that incorporate unrealistic assumptions, what do we have left? Correlations and rhetoric, which can only get you so far.
This is a stupid “something is better than nothing” defence that I’ve come across several times before. It’s based on the assumption that any map is better than no map. Yeah, right.
“Hey, Honey, I don’t have a map of this crocodile-infested swamp – but don’t worry, I have a map of New York so we’ll be out of here in no time…”
If we need bulldozers and have shovels, obviously we should stick to shovels until we have bulldozers - after all, they can do some of the work of the bulldozers.
ReplyDeleteThe question I primarily worry about is whether the criteria used by economists to evaluate models and research actually reward better shovels that slowly bring us towards the bulldozers, or whether they reward beautiful ornamental silver spoons that are stylistic jewels of unsurpassed geometric beauty, but of little use outside a sandbox.