Econ 488: The Advanced Macro Adventure!

I have a HUGE issue with the comparison of macro and micro economics to macro and micro biology. The purpose of a metaphor is to explain something complex in terms of something simple so that your readers can associate the concepts. Metaphors should simplify the paper, not convolute it. While the idea is very interesting, it is inappropriate for these reasons.

That being said, I understood from the paper that macroeconomic fluctuations are real despite errors in deriving their micro foundations. I’m kind of confused what else to take from it, as it read more like a history-reporting paper than an analysis paper to me; furthermore, the train of thought was hard to follow as the paper seemed to be very unfocused. The section criticizing price indices could develop into a paper in and of itself. While “synthetic” aggregates are imperfect, and as such should have their shortcomings brought to light to avoid their leading to faulty conclusions.

I apologize, but I really don’t know what more to say on the matter. Please inform Hoover of these criticisms, Dr. Greenlaw - I think he’s on to something, but it needs focus.

I don’t know why, but for some reason I’ve been really sensitive to when writers are using passive voice. This article was FULL of it, making it sound very obscured. Second, I think that some of the assumptions that these writers make are the result of being surrounded by like-minded people. Researchers who cloister themselves  in academia and have no social interaction outside of it have a skewed perception of how the world operates. In particular, at one point in the article they said that since an article was published, it can be considered part of agents’ consciousness. They do a very good job of categorizing key variables to form comprehensive equations - specifically  where they state that the state of the economy can be measured by policy variables, decision variables, and random shocks. While I disagree with the assumptions that they make in order to generate these points, they make their general principle easier to conceptualize. Perhaps with more realistic assumptions, this technique would be more valuable.

The conclusions Kydland and Prescott draw are similar to the reading we have done in
Comparative this semester. They state at the end that constitutional rules should be made costly in order to ensure political stability. This is what Ostrom states in her book - however, she does allow operational rules to be altered more readily. With political stability, individuals will be more likely to adopt strategies in response to a change in the environment (which in this case could be a metaphor for a “technological” shock). Had I read this article without any prior notion of what RBC theory indicated and assumed, I think I would have found the conclusions realistic. I do feel that they oversimplify, but I wonder: if this had been my only exposure to RBC, would I have supported its general ideas?

I’m trying very hard to be open-minded about reading from schools of thought that I disagree with. That is why I’m not tearing this article to shreds. While I find a lot of it BS, I think the end product is on the right track.