For a dispassionate observer, Stanley Fischer’s speech and the tidal wave of blog comments make it pretty clear that there is an intellectual black hole where something like a true economic theory should be.
There is absolutely no use in entering into the swamp of conflicting nonsense. Here are two fixpoints to secure some orientation
- Inflation theory has never risen much above the commonplace Quantity Theory. The QT is plausible but ultimately untenable. The correct formula for the macroeconomic price level is given on Wikimedia AXEC64. For details see (2015, eq. (12)).
- Alternative macroeconomic approaches like Krugman’s IS-LM are fundamentally flawed since Keynes and Hicks (2014) without the representative economist ever spotting the provable formal defect.
So there is nothing to choose from. Current economics consists of political economics that is scientifically worthless, and theoretical economics that is logically and materially inconsistent. Luckily, Jackson Hole shows: economists are clueless, but never speechless.
Kakarot-Handtke, E. (2014). Mr. Keynes, Prof. Krugman, IS-LM, and the End of
Economics as We Know It. SSRN Working Paper Series, 2392856: 1–19. URL
Kakarot-Handtke, E. (2015). Major Defects of the Market Economy. SSRN Working
Paper Series, 2624350: 1–40. URL