05 Nov 2011

The Most Ironic Statement I’ve Heard All Week

Economics, Federal Reserve, Market Monetarism 8 Comments

“Theoretical macroeconomists love to play with their little toy models, but unfortunately these models don’t actually describe the world we live in.”

If you’ve been reading this blog for at least two months, you know who said it.

8 Responses to “The Most Ironic Statement I’ve Heard All Week”

  1. Joseph Fetz says:

    Um, yeah. That has kind of been the Austrian argument the entire time (irrespective of time/date, decade/generation).

  2. Matt Flipago says:

    First rule of annoying know it all, “That’s not Ironic.”

  3. AC says:

    But Sumner doesn’t rely on toy models for his arguments

    • Ed says:

      oh no, he relies on much more solid evidence:

      “I don’t work with toy models; I try to stay grounded in the real world. I notice that periods of above 5% NGDP growth (like the 1970s) are viewed as periods where monetary policy was too expansionary. And when NGDP plummets, like in the 1930s, money was too tight. And when NGDP grew at a steady rate of 5%, we achieved the best macro performance in history, the so-called “Great Moderation.” And when we let NGDP collapse in late 2008 and 2009, we had a very severe recession.”


      • Tel says:

        Want a faster car?

        Just doctor the speedometer a bit….

        Want to live longer and stay young?

        Just bullshit about your birthday…

        Is there anything that dishonesty can’t do?

        • Rick Hull says:

          It all comes back to the seen and the unseen. Dishonesty works for a while, but reality bites, eventually.

  4. Turner says:

    Sumner criticised MMT on the grounds that

    ‘My theory is that they focus too much on the visible, the concrete, the accounting, the institutions, and not enough on the core of monetary economics, which I see as the ‘hot potato phenomenon.’

    in other words: nice reality, but what about the theory?

    How the hell can he write things like that, then things like this? Urgh.