Physics models can have a wide variety of different simplifying assumptions. Models in some areas will include a full description of relativistic behaviour, while others will not. Some models describe objects based on the quantum mechanical interactions between particles, some treat gas molecules as essentially point particles that don’t interact. These different models and differentContinue reading “Assumptions in Macroeconomics”
Tag Archives: Macroeconomics criticism
Do Microfoundations address the Lucas Critique?
Modern macroeconomics has been endlessly criticized, not only by critics of mainstream economics, but also by many prominent mainstream economists. For example, nobel price winners such as Paul Romer, Paul Krugman, and Joseph Stiglitz have written articles in which they disparage modern macroeconomists. Even economists who have been very involved with such models such asContinue reading “Do Microfoundations address the Lucas Critique?”
How increasing returns leads to non-neutrality of money
In 1980 an economist called Yew-Kwang Ng published a paper called Macroeconomics with Non-perfect Competition to little acclaim. The paper was cited a few times, and someone wrote a response that entirely missed the point of his argument. The main argument of his paper was largely ignored. Yew-Kwang Ng has written essentially the same paperContinue reading “How increasing returns leads to non-neutrality of money”
The Mountain Goat Economics 