October 2011

Michael Woodford: A Response to John Kay

Yesterday, INET published a paper, written by John Kay, that deals with the relationship between economics and the world we live in. The Map Is Not the Territory: An Essay on the State of Economics spells out methodological critiques of economic theory in general, and of DSGE models and rational expectations in particular. Read more

Posted by Michael Woodford at 2:04 pm

Harald Uhlig: Economics and Reality

Earlier today, INET published a paper, written by John Kay, that deals with the relationship between economics and the world we live in. The Map Is Not the Territory: An Essay on the State of Economics spells out methodological critiques of economic theory in general, and of DSGE models and rational expectations in particular.

INET forwarded Kay's paper to a handful economists and invited them to respond. Here we offer a perspective by Harald Uhlig, Chairman of the Economics Department of the University of Chicago, who sent us his recent working paper: Read more

Posted by The Institute for... at 4:51 pm

John Kay: The Map Is Not the Territory: An Essay on the State of Economics

Today, INET presents you a paper that deals with the relationship between economics and the world we live in. John Kay spells out methodological critiques of economic theory in general, and of DSGE models and rational expectations in particular. The paper builds on two articles that Kay, Fellow at St. John’s College of Oxford University and Visiting Professor at the London School of Economics, recently published in the Financial Times (scroll down to find the links). It is concerned with the relation of quantitative models to the world in which we live, and with evergreens such as the implications of unrealistic assumptions in economic theory. Highly recommended reading. Read more

Posted by John Kay at 3:26 pm

MEDIA MENTIONS: A psychoanalyst reviews "Minding the Markets"

INET awarded a grant to David Tuckett to develop a case for "emotional finance" in economics and finance theory. David's earlier research, based on extensive interviews with fund managers, is now published as a book: Minding the Markets: An Emotional Finance View of Financial Instability. Dr. Prudence L. Gourguechon, a psychoanalyist writing for the Huffington Post, has published a review: Read more

Posted by The Institute for... at 5:10 pm

On the Playground: Did your teaching change in response to the crisis?

The kind of economics taught in graduate schools was the main contributor to the current crisis, claims Anatole Kaletsky - a statement that begs the question: Has economics teaching changed in response to the current crisis? "The Kids" asked a dozen economists in the halls of the Mount Washington Hotel in Bretton Woods, and we invite you to watch what they said.

The Teaching of Economics Read more

Posted by The Institute for... at 9:35 pm