September 18th, 2016
(written by lawrence krubner, however indented passages are often quotes). You can contact lawrence at: email@example.com
I think this is actually happening in most fields, not just economics. It’s happening in physics, in biology, in computer technology:
In response to the observation that the shocks [in DSGE models] are imaginary, a standard defense invokes Milton Friedman’s (1953) methodological assertion from unnamed authority that “the more significant the theory, the more unrealistic the assumptions (p.14).” More recently, “all models are false” seems to have become the universal hand-wave for dismissing any fact that does not conform to the model that is the current favorite.
The noncommittal relationship with the truth revealed by these methodological evasions…goes so far beyond post-modern irony that it deserves its own label. I suggest “post-real.”