Thursday, February 6, 2014

I don't think so, Roger

Roger Farmer: How the New Classicals drank the Austrians' milkshake is still a name that is lovingly invoked by goldbugs, Zero Hedgies, Ron Paulians, and various online rightists. But as a program of scholarship it seems mostly dead. There is a group of "Austrians" at George Mason and NYU trying to revive the school by evolving it in the direction of mainstream econ, and then there is the Mises Institute, which contents itself with bathing in the fading glow of the works of the Old Masters. But in the main, "Austrian economics" is an ex-thing. It seems to me that the Austrian School's demise came not because its ideas were rejected and marginalized, but because most of them were co-opted by mainstream macroeconomics. The "New Classical" research program of Robert Lucas and Ed Prescott shares just enough similarities with the Austrian school to basically steal all their thunder. The main points being...

No, the whole thing in its original form seems sound and calculatable, to me anyway.

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