28 Sep 2009

Narayana Kocherlakota on the state of Macroeconomics


Kocherlakota draws on a sample of macroeconomists that received their Phd at 17 major economic departments in the US, to arrive to ten conclusions:
1 - Macroeconomists don't ignore heterogeneity
2 - Macroeconomists don't ignore frictions
3 - Macroeconomic modelling doesn't ignore bounded rationality
4 - Macroeconomic models do incorporate a role for government interventions
5 - Macroeconomists use both calibration and econometrics
6 - There is no freswater/saltwater divide - now
7 - These researchers have been much more interested in the consequences of shocks that in their sources
8 - The modelling of financial markets and banks in macroeconomic models has been stark
9 - Macroeconomics is mostly math and little talk
10 - The macro-principles textbooks don't represent our field well


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