It’s official: academic economists are not too interested in reality.

I like this post by Simon Wren-Lewis. The first two sentences say, “Internal consistency rather than external consistency is the admissibility criteria for microfounded models. Which means in ordinary English that academic papers presenting macroeconomic models will be rejected if some parts are theoretically inconsistent with other parts, but not if some model property is inconsistent with the data.”

Later he says “In Real Business Cycle models, all changes in unemployment are voluntary. If unemployment is rising, it is because more workers are choosing leisure rather than work.”

So there you have it. The rise in unemployment over the last five years has nothing to do with silly lending by banks. If I’ve got this right, it’s all down to those lazy workers choosing leisure as against going out to work.

Can’t these economists just be given the job of counting the number of angels dancing on pin heads?


Author: Ralph Musgrave - Ralphanomics

I wrote a book on unemployment recently with James Galbraith, and others. Galbraith is one of Obama's economic advisers. I love the different cultures that exist in this world. I took an interest in them long before the daft word 'multiculturalism' was widely used. I want to see these cultures preserved. I want to see Tibet staying Tibetan, and Britain staying British.

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