Over the fold, yet more from my book-in-progress, Zombie Economics: Undead ideas that threaten the world economy. This is from the Beginnings section of the Chapter on Micro-based Macro, and covers the breakdown of the Phillips curve and the rise of New Classical and Rational Expectations macro. This (along with the bits to come on DGSE models) is probably the section on which my own background is weakest, so feel free to point out my errors.

I’ve now posted drafts of the first three chapters (+Intro) at my wikidot site, so you can get some context. In particular, before commenting on omissions, take a quick look to see that the point hasn’t been covered elsewhere.

Micro-based macro is here

I’ve got a lot out of comments and discussion so far, and I hope some of this is reflected in what you are reading.

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Another installment of my slowly-emerging book on Zombie Economics: Undead ideas that threaten the world economy. This is from the Beginnings section of the Chapter on Micro-based Macro. I’ve now posted drafts of the first three chapters (+Intro) at my wikidot site, so you can get some context. In particular, before commenting on omissions, take a quick look to see that the point hasn’t been covered elsewhere.

Micro-based macro is here

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I’ve been moving slowly on the book for the last few weeks, but I have taken one positive step to encourage further discussion. In response to suggestions from readers, I’ve started a wiki site imaginatively named Zombiecon where my plan is to post draft chapters. The Efficient Markets Hypothesis is already up. In part, the idea is to provide a reference to avoid some of the problems that arise from blogging a section at a time. But, if someone wants to create one or more talk pages on the site itself, that would be great. I’m not really sure joint editing in the mode of Wikipedia, but if you have suggested minor changes, go ahead and make them – I may revert or partially adopt them. ????? ???? ? ????????? ????????

I’m starting now on what will I think be the hardest and most controversial chapter of my book – the argument that the search for a macroeconomic theory founded on (roughly) neoclassical micro, which has been the main direction of macro research for 40 years or so, was a wrong turning, forcing us to retrace our steps and look for another route. As always, comments and criticisms accepted with gratitude.

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A little bit I plan to include in the chapter on the Great Moderation, linking on to a critique of post-70s macroeconomics. As always, comments and criticism gratefully (and, mostly, I hope, gracefully) accepted

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In any book on policy thinking, the easy bit (not all that easy!) is to write about what’s wrong with existing ideas, in my case the zombie ideas I’m writing about. The chapter plan for my book includes, in each chapter, a section on “What next”. As regards the Great Moderation, which was essentially an interpretative claim about the data, it’s not really clear what to include. I’m leaving the details of macroeconomic thinking and policy for another chapter and writing about how society should handle risk. Comments and criticism appreciated as always.

I’m in the process of setting up a site at wikidot.com where the whole draft will be presented in wiki format. But I’ve been travelling and haven’t managed to get it going yet.
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Another section of the Great Moderation chapter from my book. I’m getting a lot of value from the comments, both favorable and critical, so please keep them coming.

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Another longish extract from my book project. Corrections and suggestions of all kinds are welcome. I’m also thinking it might be good to have a website where it’s possible to look at, and comment on, all the draft chapters, but I suspect people prefer the atmosphere of a comments thread. Any thoughts on this?

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The current working title for the book is Zombie Economics: Six Dead Ideas that Threaten the World Economy (suggestions for a better subtitle are welcome) and that requires a new intro.

Also, I’ve come to the view that “market liberalism”, as opposed to “economic liberalism”, is a better name for the viewpoint, based on the efficient financial markets hypothesis and other ideas criticised here, that has dominated policy thinking in recent decades.

Any thoughts on these points, or the revised intro, would be most welcome.
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Writing a critique of the Efficient Markets Hypothesis in terms rigorous enough to stand up to scrutiny, but comprehensible to the average reader hasn’t been easy, and I still have a lot more work to do. But thanks to the help I’ve had from commenters here and at my blog, and from other readers, I hope to make a go of it. Now comes the hard bit: suggesting some alternatives, both in theory and policy. I’m not by any means satisfied with this draft. In particular, I need to go back and get a better linkage to the question “if the market price for assets is not the “right” price, what is?”. But, I thought I’d do better getting some help and criticisms now, rather than trying for some more polish first.

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