Contemporary macroeconomics and the phrase “aggregate demand”

Without meaning to take sides in the controversy, I got a kick out of this sentence, which describes the attitudes of contemporary macroeconomists:

Even something anodyne like “demand might also play a role” would come across like the guy in that comic who asks the engineers if they’ve “considered logarithms” to help with cooling.

The blog post, by JW Mason, is interesting throughout.  I liked this bit too:

Only conservative economists acknowledge this theoretical divide. You can find John Cochrane writing very clearly about alternative perspectives in macro. But saltwater economists — and the best ones are often the worst in this respect — are scrupulously atheoretical. I suspect this is because they know that if they wanted to describe their material in a more general way, they’d have to use the language of intertemporal optimization, and they are smart enough to know what a tar baby that is. So they become pure empiricists.

This is a useful and fun piece for sorting out different attitudes, methods, and terms in contemporary macroeconomics.  Hat tip goes to the excellent Interfluidity.


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