Monopoly is a powerful thing, particularly where economic ideas are concerned. If economists are to solve the problems that people care about, they must stop treating production as an afterthought and accept – as all other natural and social sciences have – that theories of equilibrium are a comforting nineteenth-century relic.
AUSTIN – In a remarkable catalogue of horrors for The New York Times, journalist Ben Casselman details the “central tenets” of mainstream economics that have fallen out of political favor: free trade, open borders, a carbon tax, fiscal austerity. Covering the American Economic Association’s recent annual meeting in San Francisco, Casselman notes the problems that economists have not solved: deindustrialization, the 2008 crash and ensuing recession, the long-term growth slowdown. And he highlights their biggest forecasting failures: the 2007-09 financial crisis, the 2021-22 price shock, and the transitory nature of the resulting inflation, which has so far receded without triggering a recession.
AUSTIN – In a remarkable catalogue of horrors for The New York Times, journalist Ben Casselman details the “central tenets” of mainstream economics that have fallen out of political favor: free trade, open borders, a carbon tax, fiscal austerity. Covering the American Economic Association’s recent annual meeting in San Francisco, Casselman notes the problems that economists have not solved: deindustrialization, the 2008 crash and ensuing recession, the long-term growth slowdown. And he highlights their biggest forecasting failures: the 2007-09 financial crisis, the 2021-22 price shock, and the transitory nature of the resulting inflation, which has so far receded without triggering a recession.