Krugman: "Plain ordinary macro has worked fine" | "EE" | Economics & Economists - İktisat & İktisatçılar | Scoop.it

Still thinking my way through the Reinhart-Rogoff debacle and related issues, and I think there’s an important point to be made here about the state of macroeconomics.

 

You can already see quite a few people reacting to this affair by declaring that macro is humbug, we don’t know anything, and we should just ignore economists’ pronouncements. Some of the people saying this are economists themselves!

 

But the truth is that basic macroeconomics — IS-LM type macro, the stuff that’s in Econ 101 textbooks — has performed spectacularly well in the crisis.