A paradigm is defined by its axioms. Orthodox economics is built upon this set of foundational hard core propositions: “HC1 economic agents have preferences over outcomes; HC2 agents individually optimize subject to constraints; HC3 agent choice is manifest in interrelated markets; HC4 agents have full relevant knowledge; HC5 observable outcomes are coordinated, and must be discussed with reference to equilibrium states.” (Weintraub, 1985)
The representative economist has not realized it but methodologically these premises are forever unacceptable. It should be pretty obvious that the neo-Walrasian hard core contains THREE NONENTITIES: (i) constrained optimization (HC2), (ii) rational expectations (HC4), (iii) equilibrium (HC5).
Nowadays, all scientists agree that angels, phlogiston, epicycles, superman, and the Easter Bunny are nonentities. As far as economics is concerned we can agree that utility, constrained optimization, intertemporal optimization, rational expectation, well-behaved production functions or supply-demand-equilibrium are nonentities just like the Easter Bunny. Every model that contains a nonentity is A PRIORI false. In practical terms: as soon as the word equilibrium/disequilibrium appears in an economic paper it can be thrown into the waste basket. The same holds for all other nonentities.
The discussion of models that contain nonentities is vacuous. Nick Rowe, J. W. Mason and David Glasner resemble medieval witch hunters who exchange their opinions about the difference between incubus and succubus.
Rethinking economics means to discard the failed paradigms and to fully replace Walrasian microfoundations and Keynes’s flawed macrofoundations by something new which has to be entirely FREE of nonentities. As Romer has recognized, with DSGE economics has hit the wall at the end of the blind alley.
I have proven* that:
― Walrasian microfoundations are materially/formally inconsistent since 140 years,
― Keynesian macrofoundations are materially/formally inconsistent since 80 years.
From this follows:
― economics is a failed science,
― economists are incompetent scientists.
Refute it or retire.
* For details see blog