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Is neo-Walrasian macroeconom(etr)ics a dead end? An assessment of recent criticisms of DSGE models

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  • Roberto Marchionatti
  • Lisa Sella

Abstract

After the 2008 “new Great Crisis,” it is widely recognized that mainstream macroeconom(etr)ics—the last result of Lucas’s anti-Keynesian revolution of the 1980s, which tried to give macroeconomics sound neo‐Walrasian microeconomic bases —has failed to anticipate and then appraise the crisis. Has this crisis revealed a failure of this macroeconom(etr)ics as a scientific theory? Mainstream macroeconomists defend their models on the basis of their alleged superiority in terms of clarity and coherence. The thesis of this article is that this claim about superiority is false. The study argues that the reasons for the failure of mainstream macroeconom(etr)ics—in particular its poor predictive performance and interpretative weakness—reside in the implications of the neo-Walrasian legacy and the problems connected with the implementation of that program.

Suggested Citation

  • Roberto Marchionatti & Lisa Sella, 2017. "Is neo-Walrasian macroeconom(etr)ics a dead end? An assessment of recent criticisms of DSGE models," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 40(4), pages 441-469, October.
    • Handle: RePEc:mes:postke:v:40:y:2017:i:4:p:441-469
    DOI: 10.1080/01603477.2017.1319250
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    1. Brunner, Karl & Meltzer, Allan H., 1976. "The Phillips curve," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 1(1), pages 1-18, January.
    2. Wagner, Alfred, 1891. "Marshall's Principles of Economics," History of Economic Thought Articles, McMaster University Archive for the History of Economic Thought, vol. 5, pages 319-338.
    3. Brunner, Karl & Meltzer, Allan H., 1977. "Stabilization of the domestic and international economy," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 5(1), pages 1-6, January.
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    1. Chatelain, Jean-Bernard & Ralf, Kirsten, 2018. "Publish and Perish: Creative Destruction and Macroeconomic Theory," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 46(2), pages 65-101.

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