Tuesday, December 14, 2010

Drinking microfoundations from a fire hose

- Peter Diamond's prize lecture
- Dale Mortensen's prize lecture
- Chris Pissarides's prize lecture

I have now listened with great interest to all of these, but my title was chosen for a reason - I have no idea how to distill it all for readers right now, and I think I'm going to listen to Pissarides's a second time. All very good - listen to them if you haven't already.

- Rajiv Sethi on microfoundations with lots of good links (HT Mark Thoma)

- David Andolfatto isn't really talking about microfoundations, and it's not really a fire hose... it's a strong garden hose that you realize somebody put a kink in... maybe that kink will eventually be released, and a gush of water will come out, but by the end of it I didn't get that much out of it. He starts of by accusing certain Keynesians of being naive and simple-minded, then he acts like he's going to put together some more sophisticated framework to demonstrate that, and then the framework he comes out with essentially ends up telling a Keynesian story. I link it here because the framework itself (which he links to) is more formal and sophisticated than a lot of blog posts you see, and formalism is always nice in this quite informal medium that we are all operating in. Still... the story sounds pretty Keynesian to me. And what he calls "rational pessimism" and "irrational pessmism" both sound Keynesian to me (he only calls it Keynesian if its "irrational pessimism", and that seems to be the sum total of his critique of Keynesian stories).

All this makes me think I need to read Phelps et al. as soon as this populism stuff is out of the way.

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