An FAQ for Mainstream/Neoclassical Economists
I was just rereading the post on Unlearning Economics about what’s wrong with economics, and remembered just how good a post it is. I wish more commentators were as uncompromising and direct in their criticism. A particularly good section quotes Noah Smith:
However, as for the complex models, Noah Smith explained it best:
The whole notion of thinking of each interesting feature of the economy as a “friction,” and then of considering only one or two “frictions” at a time, has been very detrimental. For one thing, it makes it hard to develop a useful model of the economy, since the actual economy contains many, many “frictions” (so many that the “frictions” together are usually more important than the “frictionless” dynamics that supposedly “underlie” them). Also, the “one friction at a time” approach makes it very difficult to generate any alternatives to the classical “core theory” of Walrasian general equilibrium.