Posted by: Tom Keene on January 20, 2012
…the inflation and the stagflation of the 1970s did more to persuade economists that there was something wrong with Keynesian economics—that you needed supply-side policies and all that—than all the empirical evidence on the econometric studies against Keynesian economics. Sometimes you have to be hit over the head with a hammer before you give up a beloved theory.
—Mark Blaug, The State of Modern Economics, Challenge, May-June 1998.
We are in the moment. The moment is our perception of now (we are dithering), an interpretation of the past (we dithered), and an overconfidence of the future (we will cease dithering).
Then there is Europe.
Some ignore any sense of applied thinking and are beyond theoretical foundations. Others study and apply the applied and studiously ignore the heavy lifting of…theory.
A select few have the courage to apply, with confidence, resting on theory while questioning those very theoretical foundations.
Davos beckons. Smart people will descend. They should read Mark Blaug. (Full disclosure: a dense must-read.)
Clear the U.S. housing market. Clear Beijing’s pollution. Clear Greece. We can’t, unless we intellectually advance with a hammer. Discuss.