On the lack of macroeconomic consensus

2 January, 2013 at 18:53 | Posted in Economics | 1 Comment

I don’t understand all the hand-wringing about the lack of consensus among macroeconomists. In my view, there isn’t a consensus and there shouldn’t be.

All kinds of folks are worried about the absence of general agreement within the field of macroeconomics. Mark Thoma, Kevin Drum, Simon Wren-Lewis, John Quiggin, and Noah Smith, among many others, have expressed their concern that there’s no single agreed-upon guide to theory, analysis, and policy among contemporary macroeconomists.

The biggest mistake they make is to assert that the consensus that once existed has fallen apart … The fact is, there never was such a consensus. Perhaps, yes, among mainstream macroeconomists—among so-called New Classical and New Keynesian economists, for example—but not among macroeconomists as a whole. Because then you have to leave out all the other practicing economists working on macroeconomic issues, from Marxists and Post Keynesians to radicals and feminists. We never entered into that supposed consensus—not before 2008 and not now.

What these commentators fail to understand is that macroeconomics, like every other area of economics, comprises different theories …

There’s no doubt that the hegemony in and of mainstream macroeconomics before 2008 failed miserably. And mainstream macroeconomists are still trying to pick up the pieces.

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