The implications: Greater than S+S could imagine

 

From the Tuesday post:

Writing of Samuelson and Solow's 1960 paper, James Forder said:

 The question they were addressing was that of the explanation of the inflation of the 1950s – particularly the period 1955-57 – and the implications it had for macroeconomics.

 

From Steve Waldman in comments:

I agree that one episode is not a proof of anything, but despite that, the episode in question provoked massive and in my opinion unwarranted and very destructive changes in the views of macroeconomists. I’m trying to counter those changes here.

 

From Waldman's post:

Since the 1970s, macroeconomics as a profession has behaved like some Freud-obsessed neurotic, constantly spinning yarns about how the trauma of the 1970s means this and that, “Keynes was wrong”, “NAIRU”, independent (ha!) central banks. A New Keynesian synthesis made of output gaps and inflation and no people at all, just a representative household reveling in its microfoundations. Self-serving tall tales of the Great Moderation, all of them.