On 11/26/2010 10:16 PM, Mike Beggs wrote:
> I can't understand how smart people take
> something like real business cycle theory seriously.
Speaking of which, the Journal of Economic Perspectives finally got around to having a symposium on the macroeconomics of the crisis. Their RBC contribution was from Lee Ohanian (who insisted on calling his approach "neoclassical," not RBC -- is that some species of PC, or is there a difference?) I'm convinced the editors presented the article as a way of discrediting "neoclassical" macro. Ohanian's discussion of promising research included this:
> my coauthors and I
> construct a model in which the possibility of incorrect government
> announcements about the state of the economy impair households’
> ability to infer the actual state, and
> lead households to reduce market hours until they can more clearly
> deduce the state of the economy.
!!!!!
SA