Thursday, November 17, 2016

A transdiciplinary discourse on finance and economics

Policy dead-end: Central Banks’ continued use of DSGE Models

From Andre Breedt's Op-Ed 15/11/2016 POLITHEOR :

" ...The DSGE model has been the workhorse of central banks since the early 1980’s and has suffered from abundant and scathing critique: Olivier Blanchard argues that DSGE models are “seriously flawed” and Paul Romer – a doyen of the neo-classical economic fraternity – accuses these macroeconomic models of “attribute[ing] fluctuations in aggregate variables to imaginary causal forces that are not influenced by the action that any person takes”. ..."

... A basic proposal is to increase collaboration between the core orthodoxy of economics and ancillary fields such as econophysics, and move towards a discourse of multi or interdisciplinary coordination. ... "

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