I’m a bit worried, however, Michael Spence has not gotten the memo — i.e. he seems yet to internalize the seminally consequential scientific insight recently re-advertised by David Laidler that “a monetary economy has .. properties that cannot be analyzed using the tools of Arrow-Debreu style equilibrium modeling.”
the good news is that we recognize that in finance and parts of macroeconomics the models or frameworks are incomplete. That represents a challenge to the academic community.
What Spence is suggesting is the mathematical completion of a currently incomplete mathematical construct — but if Laidler and Hayek (among others) are correct, there are fundamental properties of a monetary economy which can never succumb to tractable mathematical construction. Giving license to academics to go on an endless holy grail quest attempting a formally impossible squaring of the circle may be good news to professional macroeconomists caught in the imperative to publish or perish, but is bad news to the prospects of ever achieving a causally viable macroeconomic science.