mainstream economics

Consistent modelling and inconsistent terminology

Image reproduced from here

Simon Wren-Lewis has a couple of recent posts up on heterodox macro, and stock-flow consistent modelling in particular. His posts are constructive and engaging. I want to respond to some of the points raised.

Simon discusses the modelling approach originating with Wynne Godley, Francis Cripps and others at the Cambridge Economic Policy Group in the 1970s. More recently this approach is associated with the work of Marc Lavoie who co-wrote the key textbook on the topic with Godley.

The term ‘stock-flow consistent’ was coined by Claudio Dos Santos in his PhD thesis, ‘Three essays in stock flow consistent modelling’ and has been a source of misunderstanding ever since. Simon writes, ‘it is inferred that mainstream models fail to impose stock flow consistency.’ As I tried to emphasise  in the blog which Simon links to, this is not the intention: ‘any correctly specified closed mathematical macro model should be internally consistent and therefore stock-flow consistent. This is certainly true of DSGE models.’ (There is an important caveat here:  this consistency won’t be maintained after log-linearisation – a standard step in DSGE solution – and the further a linearised model gets from the steady state, the worse this inconsistency will become.)[1]

Marc Lavoie has emphasised that he regrets adopting the name, precisely because of the implication that consistency is not maintained in other modelling traditions. Instead, the term refers to a subset of models characterised by a number of specific features. These include the following: aggregate behavioural macro relationships informed by both empirical evidence and post-Keynesian theory; detailed, institutionally-specific modelling of the monetary and financial sector; and explicit feedback effects from financial balance sheets to economic behaviour and the stability of the macro system both in the short run and the long run.

A distinctive feature of these models is their rejection of the loanable funds theory of banking and money – a position endorsed in a recent Bank of England Quarterly Bulletin and Working Paper. Partially as a result of this view of the importance of money and money-values in the decision-making process, these models are usually specified in nominal magnitudes. As a result, they map more directly onto the national accounts than real-sector models which require complex transformations of data series using price deflators.

Since the behavioural features of these models are informed by a well-developed theoretical tradition, Simon’s assertion that SFC modelling is ‘accounting, not economics’ is inaccurate. Accounting is one important element in a broader methodological approach. Imposing detailed financial accounting alongside behavioural assumptions about how financial stocks and flows evolve imposes constraints across the entire system. Rather like trying to squeeze the air out of one part of a balloon, only to find another part inflating, chasing assets and liabilities around a closed system of linked balance sheets can be an informative exercise – because where leverage eventually turns up is not always clear at the outset. Likewise, SFC models may include detailed modelling of inventories, pricing and profits, or of changes in net worth due to asset price revaluation and price inflation. For such processes, even the accounting is non-trivial. Taking accounting seriously allows modellers to incorporate institutional complexity – something of increasing importance in today’s world.

The inclusion of detailed financial modelling allows the models to capture Godley’s view that agents aim to achieve certain stock-flow norms. These may include household debt-to-income ratios, inventories-to-sales ratios for firms and leverage ratios for banks. Many of the functional forms used implicitly capture these stock-flow ratios. This is the case for the simple consumption function used in the BoE paper discussed by Simon, as shown here. Of course, other functional specifications are possible, as in this model, for example, which includes a direct interest rate effect on consumption.

Simon notes that adding basic financial accounting to standard models is trivial but ‘in most mainstream models these balances are of no consequence’. This is an important point, and should set alarm bells ringing. Simon identifies one reason for the neutrality of finance in standard models: ‘the simplicity of the dominant mainstream model of intertemporal consumption’.

There are deeper reasons why the financial sector has little role in standard macro. In the majority of standard DSGE macro models, the system automatically tends towards some long-run supply side-determined full-employment equilibrium – in other words the models incorporate Milton Friedman’s long-run vertical Phillips Curve. Further, in most DSGE models, income distribution has no long-run effect on macroeconomic outcomes.

Post-Keynesian economics, which provides much of the underlying theoretical structure of SFC models, takes issue with these assumptions. Instead, it is argued, Keynes was correct in his assertion that demand deficiency can lead economies to become stuck in equilibria characterised by under-employment or stagnation.

Now, if the economic system is always in the process of returning to the flexible-price full-employment equilibrium, then financial stocks will be, at most, of transitory significance. They may serve to amplify macroeconomic fluctuations, as in the Bernanke-Gertler-Gilchrist models, but they will have no long-run effects. This is the reason that DSGE models which do attempt to incorporate financial leverage also require additional ‘ad-hoc’ adjustments to the deeper model assumptions – for example this model by Kumhof and Ranciere imposes an assumption of non-negative subsistence consumption for households. As a result, when income falls, households are unable to reduce consumption but instead run up debt. For similar reasons, if one tries to abandon the loanable funds theory in DSGE models – one of the key reasons for the insistence on accounting in SFC models – this likewise raises non-trivial issues, as shown in this paper by Benes and Kumhof  (to my knowledge the only attempt so far to produce such a model).

Non-PK-SFC models, such as the UK’s OBR model, can therefore incorporate modelling of sectoral balances and leverage ratios – but these stocks have little effect on the real outcomes of the model.

On the contrary, if long-run disequlibrium is considered a plausible outcome, financial stocks may persist and feedbacks from these stocks to the real economy will have non-trivial effects. In such a situation, attempts by individuals or sectors to achieve some stock-flow ratio can alter the long-run behaviour of the system. If a balance-sheet recession persists, it will have persistent effects on the real economy – such hysteresis effects are increasingly acknowledged in the profession.

This relates to an earlier point made in Simon’s post: ‘the fact that leverage was allowed to increase substantially before the crisis was not something that most macroeconomists were even aware of … it just wasn’t their field’. I’m surprised this is presented as evidence for the defence of mainstream macro.

The central point made by economists like Minsky and Godley was that financial dynamics should be part of our field. The fact that by 2007 it wasn’t, illustrates how badly mainstream macroeconomics went wrong. Between Real Business Cycle models, Rational Expectations, the Efficient Markets Hypothesis and CAPM, economists convinced themselves – and, more importantly, policy-makers – that the financial system was none of their business. The fact that economists forgot to look at leverage ratios wasn’t an absent-minded oversight. As Oliver Blanchard argues:

 ‘… mainstream macroeconomics had taken the financial system for granted. The typical macro treatment of finance was a set of arbitrage equations, under the assumption that we did not need to look at who was doing what on Wall Street. That turned out to be badly wrong.’

This is partially acknowledged by Simon when he argues that the ‘microfoundations revolution’ lies behind economists’ myopia on the financial system. Where I, of course, agree with Simon is that ‘had the microfoundations revolution been more tolerant of other methodologies … macroeconomics may well have done more to integrate the financial sector into their models before the crisis’. Putting aside the point that, for the most part, the microfoundations revolution didn’t actually lead to microfounded models, ‘integrating the financial sector’ into models is exactly what people like Godley, Lavoie and others were doing.

Simon also makes an important point in highlighting the lack of acknowledgement of antecedents by PK-SFC authors and, as a result, a lack of continuity between PK-SFC models and the earlier structural econometric models (SEMs) which were eventually killed off by the shift to microfounded models. There is a rich seam of work here – heterodox economists should both acknowledge this and draw on it in their own work. In many respects, I see the PK-SFC approach as a continuation of the SEM tradition – I was therefore pleased to read this paper in which Simon argues for a return to the use of SEMs alongside DSGE and VAR techniques.

To my mind, this is what is attempted in the Bank of England paper criticised by Simon – the authors develop a non-DSGE, econometrically estimated, structural model of the UK economy in which the financial system is taken seriously. Simon is right, however, that the theoretical justifications for the behavioural specifications and the connections to previous literature could have been spelled out more clearly.

The new Bank of England model is one of a relatively small group of empirically-oriented SFC models. Others include the Levy Institute model of the US, originally developed by Wynne Godley and now maintained by Gennaro Zezza, the UNCTAD Global Policy model, developed in collaboration with Godley’s old colleague Francis Cripps, and the Gudgin and Coutts model of the UK economy (the last of these is not yet fully stock-flow consistent but shares much of its theoretical structure with the other models).

One important area for improvement in these models lies with their econometric specification. The models tend to have large numbers of parameters, making them difficult to estimate other than through individual OLS regressions of behavioural relationships. PK-SFC authors can certainly learn from the older SEM tradition in this area.

I find another point of agreement in Simon’s statement that ‘heterodox economists need to stop being heterodox’. I wouldn’t state this so strongly – I think heterodox economists need to become less heterodox. They should identify and more explicitly acknowledge those areas in which there is common ground with mainstream economics.  In those areas where disagreement persists, they should try to explain more clearly why this is the case. Hopefully this will lead to more fruitful engagement in the future, rather than the negativity which has characterised some recent exchanges.

[1] Simon goes on to argue that stock-flow consistency is not ‘unique to Godley. When I was a young economist at the Treasury in the 1970s, their UK model was ‘stock-flow consistent’, and forecasts routinely looked at sector balances.’  During the 1970s, there was sustained debate between the Treasury and Godley’s Cambridge team, who were, aside from Milton Friedman’s monetarism, the most prominent critics of the Keynesian conventional wisdom of the time – there is an excellent history here. I don’t know the details but I wonder if the awareness of sectoral balances at the Treasury was partly due to Godley’s influence?

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Models, maths and macro: A defence of Godley

To put it bluntly, the discipline of economics has yet to get over its childish passion for mathematics and for purely theoretical and often highly ideological speculation, at the expense of historical research and collaboration with the other social sciences.

The quote is, of course, from Piketty’s Capital in the 21st Century. Judging by Noah Smith’s recent blog entry, there is still progress to be made.

Smith observes that the performance of DSGE models is dependably poor in predicting future macroeconomic outcomes—precisely the task for which they are widely deployed. Critics of DSGE are however dismissed because—in a nutshell—there’s nothing better out there.

This argument is deficient in two respects. First, there is a self-evident flaw in a belief that, despite overwhelming and damning evidence that a particular tool is faulty—and dangerously so—that tool should not be abandoned because there is no obvious replacement.

The second deficiency relates to the claim that there is no alternative way to approach macroeconomics:

When I ask angry “heterodox” people “what better alternative models are there?”, they usually either mention some models but fail to provide links and then quickly change the subject, or they link me to reports that are basically just chartblogging.

Although Smith is too polite to accuse me directly, this refers to a Twitter exchange
from a few days earlier. This was triggered when I took offence at a previous post
of his in which he argues that the triumph of New Keynesian sticky-price models over their Real Business Cycle predecessors was proof that “if you just keep pounding away with theory and evidence, even the toughest orthodoxy in a mean, confrontational field like macroeconomics will eventually have to give you some respect”.

When I put it to him that, rather then supporting his point, the failure of the New Keynesian model to be displaced—despite sustained and substantiated criticism—rather undermined it, he responded—predictably—by asking what should replace it.

The short answer is that there is no single model that will adequately tell you all you need to know about a macroeconomic system. A longer answer requires a discussion of methodology and the way that we, as economists, think about the economy. To diehard supporters of the ailing DSGE tradition, “a model” means a collection of dynamic simultaneous equations constructed on the basis of a narrow set of assumptions around what individual “agents” do—essentially some kind of optimisation problem. Heterodox economists argue for a much broader approach to understanding the economic system in which mathematical models are just one tool to aid us in thinking about economic processes.

What all this means is that it is very difficult to have a discussion with people for whom the only way to view the economy is through the lens of mathematical models—and a particularly narrowly defined class of mathematical models—because those individuals can only engage with an argument by demanding to be shown a sheet of equations.

In repsonse to such a demand, I conceded ground by noting that the sectoral balances approach, most closely associated with the work of Wynne Godley, was one example of mathematical formalism in heterodox economics. I highlighted Godley’s famous 1999 paper
in which, on the basis of simulations from a formal macro model, he produces a remarkably prescient prediction of the 2008 financial crisis:

…Moreover, if, per impossibile, the growth in net lending and the growth in money supply growth were to continue for another eight years, the implied indebtedness of the private sector would then be so extremely large that a sensational day of reckoning could then be at hand.

This prediction was based on simulations of the private sector debt-to-income ratio in a system of equations constructed around the well-known identity that the financial balances of the private, public and foreign sector must sum to zero. Godley’s assertion was that, at some point, the growth of private sector debt relative to income must come to an end, triggering a deflationary deleveraging cycle—and so it turned out.

Despite these predictions being generated on the basis of a fully-specified mathematical model, they are dismissed by Smith as “chartblogging” (see the quote above). If “chartblogging” refers to constructing an argument by highlighting trends in graphical representations of macroeconomic data, this seems an entirely admissible approach to macroeconomic analysis. Academics and policy-makers in the 2000s could certainly have done worse than to examine a chart of the household debt-to-income ratio. This would undoubtedly have proved more instructive than adding another mathematical trill to one of the polynomials of their beloved DSGE models—models, it must be emphasised, once again, in which money, banks and debt are, at best, an afterthought.

But the “chartblogging” slur is not even half-way accurate. The macroeconomic model used by Godley grew out of research at the Cambridge Economic Policy Group in the 1970s when Godley and his colleagues Francis Cripps and Nicholas Kaldor were advisors to the Treasury. It is essentially an old-style macroeconometric model combined with financial and monetary stock-flow accounting. The stock-flow modelling methodology has subsequently developed in a number of directions and detailed expositions are to be found in a wide range of publications including the well-known textbook by Lavoie and Godley—a book which surely contains enough equations to satisfy even Smith. Other well-known macroeconometric models include the model used by the UK Office of Budget Responsibility, the Fair model in the US, and MOSES in Scandinavia, alongside similar models in Norway and Denmark. Closer in spirit to DSGE are the NIESR model and the IMF quarterly forecasting model. On the other hand, there is the CVAR method of Johansen and Juselius and similar approaches of Pesaran et al. These are only a selection of examples—and there is an equally wide range of more theoretically oriented work.

This demonstrates the total ignorance of the mainstream of the range and vibrancy of theoretical and empirical research and debate taking place outside the realm of microfounded general equilibrium modelling. The increasing defensiveness exhibited by neoclassical economists when faced with criticism suggests, moreover, an uncomfortable awareness that all is not well with the orthodoxy. Instead of acknowleding the existence of a formal literature outside the myopia of mainstream academia, the reaction is to try and shut down discussion with inaccurate blanket dismissals.

I conclude by noting that Smith isn’t Godley’s highest-profile detractor. A few years after he died—Godley, that is—Krugman wrote an unsympathetic review of his approach to economics, deriding him—oddly for someone as wedded to the IS-LM system as Krugman—for his “hydraulic Keynesianism”. In Krugman’s view, Godley’s method has been superseded by superior microfounded optimising-agent models:

So why did hydraulic macro get driven out? Partly because economists like to think of agents as maximizers—it’s at the core of what we’re supposed to know—so that other things equal, an analysis in terms of rational behavior always trumps rules of thumb. But there were also some notable predictive failures of hydraulic macro, failures that it seemed could have been avoided by thinking more in maximizing terms.

Predictive failures? Of all the accusations that could be levelled against Godley, that one takes some chutzpah.

Jo Michell

Response to Tony Yates’ critique of Teaching Economics After the Crash

Tony Yates has written a critical rejoinder to Aditya Chakrabortty’s Radio 4 documentary on student demands for changes to university teaching of economics. Yates’ contribution is welcome as a rare example of a mainstream economist publicly engaging with the issues raised by dissatisfied students. For too long, the response of the mainstream has been to ignore criticism. Yates’ willingness to enter into dialogue – even if motivated by unhappiness with the content of the programme – is encouraging. Further, it clarifies the view of (some) mainstream economists on the teaching debate.

Yates’ first complaint is that the programme is an opinion piece rather than a report in which equal space is given to each side. It is true that the bulk of the programme focused on the grievances raised by the student movement – this was after all the subject of the piece – and provided only brief slots for dissenting voices. Criticising the programme on this basis ignores the bigger picture of total dominance by mainstream economics – not only in academia but also in the media and public debate. The number of critical economists who appear regularly on television and radio can be counted on one hand. Chakrabortty’s programme and the student movement that pushed it onto the agenda are welcome, yet remain a drop in the ocean.

Yates might reflect on the following question: Were a programme broadcast that defined economics in the terms he believes – a rigorous scientific discipline systematically discovering objective truths and discarding past mistakes – would he object to such an equally one-sided narrative?  For decades, this narrative has dominated to the extent that, until recently, there was no publicly audible debate. It is to the enormous credit of student groups that they have raised the volume of critical voices such that Chakrabortty’s programme could be made.

The more substantive criticisms made by Yates relate to what he regards as manifold factual inaccuracies peddled by interviewees and allowed to go unchallenged – in particular, inaccuracies about the assumptions of mainstream economics.

There are two important problems with Yates’ argument.  First, Chakrabortty’s programme was explicitly concerned with teaching economics – teaching economics at undergraduate level specifically.  Yates’ response is mainly concerned with academic and professional economics in general and, in particular, the higher reaches of contemporary research programmes. Second, and more importantly, Yates condenses students’ calls for increased methodological pluralism into a debate between rational choice theory and its (neoclassical) alternatives. One of the first students interviewed by Chakrabortty complains about a “lack of alternative perspectives, lack of history or context, that could include politics . . . lack of critical thinking, and lack of real world application” in undergraduate degrees. Yates’ response entirely fails to address this key issue.

The “caricatures” of mainstream economics to which Yates takes offence include rational choice, rational expectations, perfect markets, quantifiable risk, and an ignorance of money, banking and finance. Yates argues that this characterisation fails to take account of recent innovations such as bounded rationality, asymmetric information, monopolistic competition, learning effects, uncertainty, sticky prices, credit frictions, and so on. Moreover, Yates has previously argued that a course based on these types of models could adequately replace the course on Bubbles, Panics and Crashes which Manchester University cancelled.

Putting aside, for the moment, issues of methodological pluralism and historical context, does Yates really believe that Farmer’s multiple equilibrium models, internal rationality in intertemporal optimisation, or search models of money and credit should be taught in undergraduate degrees? One of us (Jump) took an MSc on which John Hardman Moore taught. Even there, the “collected works of the Kiyotaki-Moore collaboration” didn’t make it onto the syllabus. One can hardly criticise a programme about teaching economics – and, by extension, those involved with the various student movements – for ignoring papers that most PhD students find difficult to follow.  Regardless of the validity of the approach, “crunching exotic nonlinear ordinary differential equations” is unlikely to become part of the undergraduate economics syllabus any time soon.

A squabble over the exact models taught is not, however, the real issue.  While true that, since the heyday of real business cycle models, the mainstream has pulled back from the most egregious extremes of asserting a world of continuous full employment and total policy ineffectiveness, subsequent modifications to general equilibrium models – sticky prices for instant price adjustment, internal rationality for rational expectations, asymmetric information for full information – are always assumed to be “frictions” and “imperfections”; deviations from some socially optimal baseline.  Arguing about which specific unrealistic assumption has been dropped in this or that model misses the wood for the trees. The students want to be allowed to engage with different methodological approaches to economics – not to be told that if they study for another two years they can learn the Bernanke-Gertler financial accelerator model instead of the Woodford version with “perfect capital markets”.

The methodological approach of neoclassical economics – equilibria derived from optimisation problems couched in ever-more complicated mathematical settings – is highly restrictive, ideologically loaded, and universally imposed on undergraduates. The result of the complete elimination of any other approach from the curriculum is that students spend all their time learning how to manipulate abstract mathematical models which appear to hold little relevance for the real-world problems they are interested in addressing – as is made clear from the interviews conducted by Chakrabortty.

An important consequence of this methodological narrowing has been the (almost complete) eradication of economic history and the history of economic thought from the undergraduate curriculum.  This is a point conceded by Karl Whelan who argues, in his response to Chakrabortty’s programme, that mixing the formal neoclassical syllabus with “broader knowledge” would produce more rounded students – a conclusion also reached by the RES steering group on teaching economics.

Yates admits that he doesn’t believe that “any of the monetary policymakers I worked for or read believed much of [the workhorse NK model].  They worked off hunches, gut instinct, practical experiences.” (This is ironic given that Gali and Gertler – key architects and advocates of the models Yates claims policy-makers weren’t using – believe the models were introduced because previous versions were so inaccurate that “monetary policymakers turned to a combination of instinct, judgment, and raw hunches to assess the implications of different policy paths for the economy”.) What are such hunches and instincts based upon?  Aside from personal experience, one imagines that historical knowledge of previous crises played a part here (e.g., Ben Bernanke). Re-introducing this type of material into economics teaching would, as Whelan argues, produce more capable graduates.  Moreover, knowledge of the way that theory has evolved alongside economic events would provide valuable context for the “exotic non-linear equations” – but it would also cultivate an awareness of the dramatic methodological narrowing within the subject.

One of us (Michell) put this point to Yates on Twitter – admittedly not the ideal medium for careful debate. His response was approximately the following: economic history and history of economic thought are irrelevant – at best, a fun diversion for bath-time reading. This is because economics continually progresses so that the history of the discipline only reveals things “either discarded or whose husks were bettered and extracted”. As an example: “I don’t need to read Keynes to understand the liquidity trap … Wallace and Woodford suffices”.

At this point, one arrives at the inevitable argument that, whilst increasing methodological pluralism in undergraduate degrees may be a good thing, “heterodox economics” is best consigned to optional modules, or discarded altogether.  This misses a point of considerable importance: academic heterodoxy in economics is, more often than not, associated with methodological disagreement.  This is most clear in the further reaches of Post Keynesian and Austrian economics – e.g. Shackle, Lachmann – and in Marxian political economy where historical analysis is central.

If, for example, one wanted to teach the economics of financial crisis, surely the history of financial crises and inductive theory are the correct places to start?  Kindleberger and Minsky are the obvious candidates – after which more formal models could be considered.  This is not to say that the various heterodox approaches do not have their problems, but they are useful springboards to a deeper understanding of economic phenomena. Such empirically-based study would surely be a better starting point than learning Euler equations – despite the fact that the standard consumption Euler equation is known to fail miserably when taken to the data – or the standard model of a representative firm’s investment decision – despite the on-going failure of econometricians to find a robust relation between short run capital investment and the real interest rate.

Let us finish by returning to Yates’ Whig-historical view of the liquidity trap – a view which encapsulates much of the problem with mainstream economics. In modern neoclassical parlance, the liquidity trap refers to a situation in which nominal interest rates are equal to zero and quantitative easing is ineffective because changes in the quantity of (base) money have no effect on the (rational expectations) equilibrium future inflation path. As a result, the central bank is unable to reduce the real rate of interest and stimulate spending. All this matters because the economy fails to bring itself back to equilibrium in a timely fashion due to slow price adjustment.

This is unrecognisable to any serious scholar of Keynes. The liquidity trap refers to a situation in which fundamental uncertainty about the future leads people to hoard cash in preference to other financial assets, no matter how cheap those assets become. At the same time, uncertainty means firms may not commit to investment even if interest rates fall to a point that would previously have stimulated spending. The stickiness or otherwise of prices and wages is irrelevant because changes in output and employment provide the mechanism by which saving and investment are brought into equilibrium.

This brings other contentious topics to the fore, such as uncertainty, animal spirits and the neoclassical treatment of money. Each of these is highlighted by Yates as used in the programme to unfairly attack mainstream economics – he does concede that money as a veil over barter is a fair description for the most part.

Recall the definition of uncertainty emphasised by Knight and Keynes: a situation in which the future simply cannot be predicted, in contrast to a ‘risky’ situation in which all possible events are known, along with the probability of each.  This differentiation is fairly basic, and has been textbook material in game theory since (at least) Luce and Raiffa.  Now consider one example using Yates’ favoured approach to modelling uncertainty in macroeconomics: The central bank, unable to determine which of its three Phillips Curve models is correct, uses Bayesian inference to decide which model to use. This is almost beyond parody – simply a branding exercise which conceals the fact that the model has nothing whatsoever to do with the true meaning of the concept. Other “Keynesian” features of modern neoclassical economics highlighted by Yates are similarly grotesque caricatures of the original concepts.

By not studying Keynes in the original – or any other important economist from more than forty years ago – students are prevented from discovering such inconsistencies and are forced to take at face value the distortions and misrepresentations of mainstream economics. They are prevented from understanding how historical circumstance plays a role in the development and acceptance of economic theory: the Great Depression for Keynes and the stagflation of the 1970s for Friedman, for example. They also – crucially – fail to appreciate that economic and political power matters: mainstream economic theory is “history as written by those perceived to have been the intellectual victors of key debates”.

Yates describes Aditya Chakrabortty’s Radio 4 documentary as “a distorting dramatisation, on account of allowing multiple silly, uninformed critiques to go unchallenged in the program. Yet presented as a reasonable, impartial take on what is going on in economics.” This is unfair to the students involved in the reform movement and misses the main point of the programme. While we would not defend every claim made in the programme, we strongly support the call for a widening of the economics curriculum.

Given the role of the profession in contributing to the 2008 crisis, and in justifying the inexcusable policy packages imposed in response to the post-crisis expansion of sovereign debt, we might – at the very least – display some humility when addressing the inevitable public backlash. Beyond this, we must act on student demands and address past failings by implementing a fundamental overhaul of the economics curriculum.

 

Rob Jump
Jo Michell