The left-right brain divide in economics
It was there when I first studied economics. A feeling that I understood microeconomics, but not macroeconomics. Getting old, I think I know why. Micro is built on clearly articulated foundations, but macro had to go through a period around the 1970s when it had to be given its “micro foundations.” Robert Barro and Herschel Grossman even wrote a textbook from that ongoing work, and I was in a class of Brown University graduate students who went through their book in draft form.
But lately it seems that both pieces of micro and macro are groping for “institutional” foundations. An example is Willem Buiter’s recent piece on the state of macro.
For more, see my post at FOO Law and Economics.
Frank and Ernest have their own take on the phenomenon of disagreeing economists:
Economic growth – econote
Economic growth is usually taken to mean the increase over time of a country’s GDP.
Some argue that GDP is not the sole measure of economic “happiness.” They argue that growth has many dimensions, such as the quality of life and health (as reflected in levels of education and mortality), the state of the natural environment, the quality of the educational system, or even the extent of political freedom.
Some interchange “growth economics” with “development economics” (or the economics of development).
A major criticism of modern growth models is the limited extent to which they can incorporate institutions or institutional change as explanations of economic growth (see Helpman).
What’s the story behind growth models?
It looks like the problems that plague modern macro also apply to growth models in the modern macro tradition. They ignore the role of institutions because that role is “so hard to model.” A guided tour on the institutions of economic growth is by Elhanan Helpman, whose book I review here.
The ten new kids in the block, from Bryan Caplan
See the listing of modern topics here.
