Econ 488: The Advanced Macro Adventure!

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.