The unfortunate uselessness of most ’state of the art’ academic monetary economics

Buiter, Willem (2009): The unfortunate uselessness of most ’state of the art’ academic monetary economics. Published in: VoxEY (6 March 2009)

Abstract

Standard macroeconomic theory did not help foresee the crisis, nor has it helped understand it or craft solutions. This columns argues that both the New Classical and New Keynesian complete markets macroeconomic theories not only did not allow the key questions about insolvency and illiquidity to be answered. They did not allow such questions to be asked. A new paradigm is needed.

• Item Type: MPRA Paper
• Language: English
• Keywords: financial crisis, insolvency, liquidity, incomplete markets, DSGE models, New Keynesian macroeconomics, New Classical Macroeconomics
• Subjects: A - General Economics and Teaching > A1 - General Economics > A10 - General; B - History of Economic Thought, Methodology, and Heterodox Approaches > B0 - General > B00 - General; B - History of Economic Thought, Methodology, and Heterodox Approaches > B5 - Current Heterodox Approaches; E - Macroeconomics and Monetary Economics > E0 - General > E00 - General; E - Macroeconomics and Monetary Economics > E1 - General Aggregative Models > E17 - Forecasting and Simulation: Models and Applications; E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E31 - Price Level ; Inflation ; Deflation; E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E32 - Business Fluctuations ; Cycles; E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook

References

Buiter, Willem H. (2009),"The unfortunate uselessness of most ’state of the art’ academic monetary economics", Maverecon Blog, Financial Times, 3 February 2009.