^^"not yet" Oh yeah? What the hell do you think this recent Congressional hearing was about in which Chari was all by himself selling useless Kool-Aid and worn out lines nobody takes seriously except dumb shits who hang onto Randy Wright's shirt at jokes of SED conferences? It has already very publicly failed, and between people laughing their heads off at you fools and preparing not to interview you sucks, the best Chari and his thug followers can do is redefine the "DSGE framework" to include all the stuff they used to mock and reject.
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Demise of the Heteros at Notre Dame
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Posted 1 month ago #
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EDO is just modified Smet-Wouters, which the hard core DSGE people rejected when it first came out. Now they are clinging to it. Look, the new "DSGE" stuff is just revived temporary equilibria models a la Benassy and Grandmont, certainly part of GE, but not full long-run GE, which has been what DSGE has been traditionally, with its arrogant claims of using Lucas's solution to his critique (rational expectations at the aggregate level). Sargent went to Santa Fe nearly 20 years ago and produced _Bounded Rationality and Macroeconomics_ in 1993. Get it folks; once you introduce learning on adaptive ex with ratex only holding asymptotically, you are no longer in a true DSGE world, but a temporary equilibrium one.
Posted 1 month ago # -
^^how did it fail? bernanke's work on the financial accelerator in a dsge framework has been on point. you just don't know the literature at all huh?
Posted 1 month ago # -
The financial accelerator has not properly been included in DSGE. In any case finance is too complex to include in a DSGE as a singe and simple homogeneous equation.
Posted 1 month ago # -
Who says you need to do it with a single equation? There are plenty of papers that model throughly credit and entrepreneurship, for example.
Posted 1 month ago # -
Bringing up DSGE is a red herring that heterodox economist often fall back on when flaws in their own thinking are pointed out. The problem is, mainstream macroeconomists are well aware of DSGE's short comings, because we regularly test the validity of our models. We haven't replaced it because there is nothing better out there, period. This does not imply that DSGE is good, only that everything else sucks more, or sucks in less useful ways.
The real problem that the heterodox people keep trying to direct the conversation away from is that mainstream economists are interested in the application of scientific method, while they are not. We continuously test our models in order to refine them, find ways to incorporate new ideas into them, and abandon models that don't show promise. Just read the mainstream literature some time. Tons of papers testing implications of theory, finding puzzles, and searching for ways to solve those puzzles with theory. We know that DSGE isn't telling us everything we want to know about the macro theory, because we subject it to validation. In areas of macro that we know it can't effectively deal with, we've developed other models (strange that those haven't been brought up...). Hell, check out this board. People complain about DSGE all of the time. While we are unhappy with our broken models, heterodox economists seem perfectly content with theirs. Hell, the papers that were posted as proof of math skill did nothing but show you were content to continue on with a model that we figured out was broken almost 40 years ago! Economics is about trying to understand the economy, not hiding from meaningful critiques of a model that produces political implications you like.
Posted 1 month ago # -
^Another win. One good thing has come out of this thread. The screaming mimis are so busy ranting here that they're unable to produce more nonsense to pollute the academic literature.
Posted 1 month ago # -
Macroeconomists and falsification? LOL, that is a good one!
Posted 1 month ago # -
^Wow, good comeback. You must be the funniest kid in the schoolyard. By the way, when was the last time anyone checked with Minsky's "theory" (in quotations because it isn't really a theory, just a bunch of statements) was consistent with actual data? Oh right, that has NEVER HAPPENED.
Go back to chasing unicorns.
Posted 1 month ago # -
^^Get educated
http://ideas.repec.org/a/ucp/jpolec/v88y1980i4p745-70.html
http://ideas.repec.org/a/aea/aecrev/v88y1998i4p769-88.html
http://ideas.repec.org/p/nbr/nberwo/14313.htmlSome of our most important puzzles stem from what our models can't explain. We want to learn about the economy, not spew ideological bile.
Posted 1 month ago #