Mainly Macro

I think perhaps partly because it's just not being told? It wouldn't be the first time, after all. There's another great piece here on just how out-of-control the German narrative of events has become here: http://mainlymacro.blogspot.fi/2015/07/why-germany-wants-rid-of-greece… I think there's something to be said for the parallel he draws: It's essentially the typical local austerity narrative writ large. The poor/creditor are lazy and corrupt and their woes are all their fault (pay no attention to the Bugatti driving banker behind the curtain).

In theory, that would work and solve the problem. In practice, downward nominal wage rigidity is a thing. http://mainlymacro.blogspot.co.uk/2013/10/nominal-wage-rigidity-in-mac… (note especially the ludicrous 27% "natural rate" of unemployment for Spain predicted by standard economic models cited there) Ordinarily the problem would be solved by de-valuing the currency against the more competitive economies' currencies, but with the Euro that's not possible. So the best way in practice would be for the more competitive economies to incur some inflation, say 5%, for several of years so that the less competitive ones can stay at <1% and restore competitiveness that way. Unfortunately this is politically impossible in the Euro zone today, hence we have 25% unemployment in southern countries.

There are many different types of models used for different purposes. https://www.piie.com/blogs/realtime-economic-issues-watch/need-least-f… https://mainlymacro.blogspot.com/2013/12/microfoundations-illusion-of-… the models people use to explain/illustrate are more toy models, micro-founded DSGE models, for forecasting typically people tend to use empirical models. One approach would be to do a college intro to macro textbook or MOOC and then possibly a course on forecasting, like https://www.edx.org/course/macroeconometric-forecasting-2 there isn't much of a consensus on what 'properly' means but IMHO a good start is just understanding the IS/LM analysis and what the curves look like under assumptions from classical models, keynesian, and keynesian-classical synthesis (basically says more keynes in short run and more classical in long run), phillips curve, lucas critique. then some monetary economics (old school macro tends to ignore financial sector), international trade, open economy macro. with maybe a time series forecasting book/course thrown in complementarity is king https://scholar.harvard.edu/files/laibson/files/seven_properties_2008.… doing macro as an investor is a little bit like doing weather forecasting as a sailor ... it's important to understand the kinds of conditions you might be sailing in but probably a bit futile and pointless to do a very deep dive into the math of it. my question would be what is the…

> Keynes worked until stagflation happened. That's the issue that made other models come forward Keynes worked after stagflation as well: > I just do not think that is right. Stagflation is very easily explained: you just need an ‘accelerationist’ Phillips curve (i.e. where the coefficient on expected inflation is one), plus a period in which monetary policymakers systematically underestimate the natural rate of unemployment. You do not need rational expectations, or any of the other innovations introduced by New Classical economists. […] > Stagflation did not kill IS-LM. In fact, because empirical validity was so central to the methodology of macroeconomics at the time, it adapted to stagflation very quickly. This gave a boost to the policy of monetarism, but this used the same IS-LM framework. If you want to find the decisive event that led to New Classical economists winning their counterrevolution, it was the theoretical realisation that if expectations were rational, but inflation was described by an accelerationist Phillips curve with expectations about current inflation on the right hand side, then deviations from the natural rate had to be random. The fatal flaw in the Keynesian/Monetarist theory of the 1970s was theoretical rather than empirical. * https://mainlymacro.blogspot.com/2014/06/understanding-new-classical-r… > But my small quarrel with Simon involves how we got into this state. He dismisses the stagflation of the 1970s, on the grounds…

I think it's the distinction between intrinsic beliefs and beliefs based on knowledge of the world. Maybe I didn't make the distinction clear enough. The former, though we may want to change them, can't usefully be called "wrong" but the latter can. False consciousness is then wrong beliefs deliberately propagated to achieve some end. What is missing from your caricature is whether the beliefs expressed make internal sense and fit with what we know about reality. Are you entitled to a belief that we shouldn't fund space programs because they're too expensive? Of course. Are you entitled to a belief that we shouldn't fund space programs because the world is flat? No. Another good UK example is government austerity over the last decade to reduce the deficit. The government gained popular support for it using analogies about household budgets that in fact aren't very applicable to government spending. This and other arguments got picked up and repeated by the media despite not being accepted by mainstream economists [1]. This led to a divergence between popular and academic understanding of the economy's strength and weaknesses. Given all of that, how much weight should be put on the economic beliefs of someone whose only macroeconomic knowledge is gleaned from the headlines? I would say that this a classic example of false consciousness. Of course, in politics and economics neutral knowledge is a tricky concept. That's why this is inherently discursive. My economics…

Haha. But no, not only that. 90% of economists thought Brexit would be net bad [1]. But at least 50% of economists the BBC put on air thought it would be net good [2]. Edit: here's a longer-form version of this argument: https://mainlymacro.blogspot.com/2018/04/brexit-and-corbyn-how-our-med… [1] https://ifs.org.uk/articles/paul-johnson-leavers-may-not-economists-we… [2] Waking up to the Today programme for years (yes, a better source here would be nice)

Plus a largely broken press which can't or won't tackle most of what's really going on. See Simon Wren Lewis's war against "media macro": https://mainlymacro.blogspot.com/2023/02/fiscal-reporting-at-bbc.html

Simon Wren-Lewis argues that increasing supply won't help so long as there exists an arbitrage between rental yields and interest rates. Wealthy people will just outbid everyone else for the increased supply: https://mainlymacro.blogspot.com/2018/02/house-prices-and-rents-in-uk.… Richard Werner points out that the mortgage lending, with associated house price inflation, caught fire in the UK after Thatcher eliminated "corset" credit controls. That may be key to sorting the whole mess out.

A recent post on this topic: https://mainlymacro.blogspot.com/2017/09/productivity-and-monetary-pol…

Hmm? Even among fans of the book, the book's incorrect explanation of money creation is the main criticism: https://mainlymacro.blogspot.co.uk/2017/09/the-core-economicscurriculu…

Simon Wren-Lewis has written a bit about this here: https://mainlymacro.blogspot.co.uk/2017/09/the-core-economicscurriculu… He's broadly supportive but points out that section 14.8 isn't correct.

The UK conservative government and labour opposition sure seem to agree they are doing it. Do you have a definition of austerity which disagrees? The WP definition and press also seem to agree. See eg http://money.cnn.com/2014/12/08/news/economy/uk-endless-austerity-cuts… The budget effects are just evidence that austerity by spending cuts is not a very good way of saving the government money in the current situation. Cutting government spending in a recession can shrink the whole economy and cause tax revenue to drop even more, and then the resulting budget deficit proves you need to make yet more spending cuts, etc. See http://mainlymacro.blogspot.com/2015/06/the-academic-consensus-on-impa… for a more detailed marcoeconomic explanation of what's happening. (edit: changed to a newer and more fitting post from the same blog)

I don't want to be negative but the article in the spectator dismiss the Gini index (that I'm sure has its problems) using a tweet as its source. Just to weight in with an alternative view: http://mainlymacro.blogspot.fr/2014/11/redistribution-under-uk-coaliti…

"Its deficit is still like 9-10% of GDP." This is very wrong. Greece has run primary surpluses in recent years. They will probably miss that goal this year, but not by 9-10% of GDP. Forgiving Greek debts would solve the problem. http://mainlymacro.blogspot.com/2015/02/greece-and-primary-surpluses.h…