My latest ideas on macroeconomics, monetary economics, economic policy and current events.
Unsurprising. I've noticed that even very smart people tend to have utterly pedestrian views on topics outside their direct expertise.
Steve, Congrats on the new (to me) AER publication.
Steve, in reference to Noah Smith's post about freshwater schools, where does your university fall in terms of economic thought?Cheers
The freshwater/saltwater is not a meaningful division in macroeconomics within academic circles. Everyone essentially does macroeconomics the same way now. The models different people use might be different, but they all have the same flavour - specify technology and preferences and agents optimize. This is the paradigm all economics follows so it shouldn't really be a shocker.The freshwater/saltwater division might have existed 40 years ago - I'm not sure, I wasn't born yet. Seems like the only people who bring keep bringing it up are people that don't publish in macroeconomic journals or go to macroeconomics conferences.As for Steve, wouldn't want to speak for him about what he does exactly, but the New Monetarist crowd studies somewhat different problems than the typical macroeconomist. Most macro models don't have a role for money, or financial intermediation, and when they do they just stick it in and say here's a bank! or here's the money! it is useful just because. These guys instead ask what are the important frictions affecting trade that would lead to the creation of these institutions - and then more ambitiously, when conditions change how do these institutions respond. I'm not sure where on the freshwater/saltwater divide you would stick them. Instead, it all just sounds like economics to me.
Excellent, Andrew. There are some people who are stuck in the past. Where Noah is stuck I'm not sure.
Not sure where he's stuck, but I know where I'd tell him to stick it.