September 27, 2016

The trouble with Naked Keynesianism

Comment on Matias Vernengo on ‘The Trouble with Paul Romer’s Angriness’


In his recent paper, ‘The Trouble With Macroeconomics’ Paul Romer put DSGE and its main proponents ― Lucas, Sargent, Prescott ― to rest. From the fact that microfounded macro is an officially buried research program, though, does not follow that Keynesian macro can now be taken seriously.

Keynes, too, based macroeconomics on logically and conceptually defective foundations, and neither Post Keynesians nor New Keynesians nor Anti-Keynesians have realized his foundational blunder in 80+ years.

For details see How Keynes got macro wrong and Allais got it right and All models are false because all economists are stupid.

Egmont Kakarot-Handtke