February 12, 2021
Do economists finally wake up from their methodological delirium?
Comment on Lars Syll on ‘Does it — really — take a model to beat a model? No!’
Lars Syll maintains: “A more realistic approach needs to be adopted, which means one that is more practical in its methodological assumptions, more comprehensive in its substantive assumptions and more modest in its aims. At minimum, this means adopting an institution and accounting-based approach instead of a strictly axiomatic one. For starters, a stock-flow consistent approach such as advanced by Wynne Godley based on accounting.”
Right. Macroeconomic accounting is the objective-systemic core of economics and NOT some silly behavioral assumption. Methodological rule #1: If it isn't macro-axiomatized it isn't economics.
Economics is a failed science because the major approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism, MMT ― are provably false. This includes Godley’s and Lavoie’s approach. More precisely, Godley’s and Lavoie’s program ― the integrated approach to credit, money, income, production, and wealth ― is basically correct but at some point, a lethal inconsistency slipped in and that happened exactly in Section 8.2, page 262, eq. 8.25 (Godley et al., 2007).#1-#5 This blunder carries over to MMT and invalidates it also.
Lars Syll is a bit slow. The Paradigm Shift from false Walrasian microfoundations and false Keynesian macrofoundations to true macrofoundations is an accomplished fact.#6
#1 Godley, W., and Lavoie, M. (2007). Monetary Economics. An Integrated Approach to Credit, Money, Income and Wealth. Houndmills, Basingstoke, New York: Palgrave Macmillan.
For more on Godley see AXECquery.
For more on Syll see AXECquery.