Sunday afternoon for paid subscribers
The strange case of advanced macroeconomics
Since Monday night is Halloween, I am going to move the live event for paid subscribers to Sunday afternoon, October 30, 3 PM New York time.
The topic will be the peculiar disconnect between macroeconomics as taught to undergraduates and practitioners on the one hand and what gets taught in graduate school on the other. I can think of no other field where this gap is so wide.
I am not alone in noticing this phenomenon. In 2006, Greg Mankiw wrote,
In 1996, Meyer left his job as an economics professor at Washington University and as a prominent economic consultant to serve for six years as a governor of the Federal Reserve. His book provides a window into how economists at the highest reaches of monetary policymaking view their jobs and the approaches they take to analyzing the economy. The book leaves the reader with one clear impression: Recent developments in business cycle theory, promulgated by both new classicals and new Keynesians, have had close to zero impact on practical policymaking. Meyer’s analysis of economic fluctuations and monetary policy is intelligent and nuanced, but it shows no traces of modern macroeconomic theory.
Mankiw ended on a note of optimism, hopeful that the “scientists” who work on their version of macro will eventually connect with the “engineers” who use an older version. But 15 years later, that has not happened, as far as I can tell.
Mankiw likes both the academic macro and the practical macro. I dislike both.
In our event, I will try to spell out the controversy and my perspective on it. The link is below.