June 22, 2003

Brad De Long is back from counting bears in Canada and fighting bugs -- and he's blogging about corporate control, interest rates, and the National Tourist Board of Canada midge conspiracy. De Long flags this quote from the Washington Post's John Berry:

to the surprise of economists and policymakers, the recovery has been halting and "jobless" despite huge doses of monetary and fiscal stimulus...

If your "models" are un-scientific math playthings -- and your explanations are incompatible with any plausible causal mechanism (e.g. one which would include capital structure through time and real world relative price mechanisms), you shouldn't be surprised by what happens, because you have no sound justification for anticipating anything. And in my considered judgment, that is just the situation that modern macro finds itself. It's fantasy football without a football, players, or ball field. It's fake science. And you can quote me on that.

Posted by Greg Ransom