June 21, 2018

Do first your macroeconomic homework

Comment on Lars Syll on ‘The microfoundations crusade’

Blog-Reference and Blog-Reference

Lars Syll summarizes: “But one thing I do know, is that the kind of microfoundationalist macroeconomics that New Classical economists in the vein of Lucas and Sargent and the so-called New Keynesian economists in the vein of Mankiw et consortes are pursuing, are not methodologically coherent … And that ought to be rather embarrassing for those ilks of macroeconomists to whom axiomatics and deductivity are the hallmark of science tout court.”

What the representative economist has to realize is:
• Microfoundations are dead for 150+ years. Because of this, microfoundatlist macro has never been anything else than a stillborn approach.
• All microfounded approaches invariably crash against the methodological wall of the Fallacy of Composition. Methodologically, there is no such thing as microfounded macro.
• Being content with superficial criticism, Heterodoxy never realized what the lethal defect of Orthodoxy was and never developed an alternative. In methodological terms, Heterodoxy never executed the overdue paradigm shift from microfoundations to macrofoundations.
• Keynes came very close to the paradigm shift but then messed it up. After-Keynesians, with the exception of Allais, failed to this day to spot the blunder in Keynes’ macrofoundations.

Walrasian microfoundations and Keynesian macrofoundations are proto-scientific garbage. Walrasianism, Keynesianism, Marxianism, Austrianism is axiomatically false. Methodologically it holds for the inescapable Paradigm Shift: If it isn’t macro-axiomatized, it isn’t economics.

Egmont Kakarot-Handtke

Related 'Economics: a science without scientists' and 'The fundamental problem of economics: scientific incompetence aka stupidity' and 'Getting out of the economics swamp' and 'Beware of the moralizing economist' and 'Economic policy advice has never had sound scientific foundations' and 'Show first your economic axioms or get out of the discussion' and 'MMT and the canonical macroeconomic model'. For details of the big picture see cross-references Scientific Incompetence and cross-references Failed/Fake Scientists and cross-references Axiomatization.


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