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How Many Equations Should There be in Macroeconomic Models?
Recently a very old debate among macroeconomists has been reopened (this happens from time to time). Paul Romer decided to discuss a key conference held in 1978 (yes really). Some (including me) think that’s about when the profession took a wrong turn largely following Robert Lucas. But in the discussion until about yesterday, it was agreed that macroeconomics was in a bad way in 1978 and needed to change. Romer particularly criticized a paper presented by Ray Fair at the conference. This has provoked Ray Fair* to start blogging. I think it is quite important to read his post (so does Mark Thoma). Fair is very ... (full story)