Economics Confronts the Economy Confronting economists who are confronting economicsklein's

Abstract

The book consists of an introduction and eight chapters. Chapter 1 “The Unchanging Focus of Modern Economics” considers economists’ attitude toward the invisible hand. It begins with quotations from standard microeconomic textbooks (Mas-Colell, Whinston and Green, Pashigian, and Ruffin) that show how that invisible hand is treated by modern economics as a technical issue, in which voluntary trades improve agents’ position. Markets allow trade, and thus, subject to the well-known standard conditions, make people better off. The texts train students in models that demonstrate the same. The chapter explores how the invisible hand metaphor has significantly deviated from Adam Smith's first use of the term. Klein argues that Smith's contextualization has been lost in technical proofs. Chapter 2, “Making Progress with Theory: Do We Get What We Want or Want What We Get?” considers macroeconomic issues; it points out that there is little communication among different schools of economics, and that researchers play by their own rules. In it Klein discusses Robert Lucas's positive view of W. C. Mitchell, and Lucas’ negative view of Keynes. Klein concludes the chapter with a discussion of how, today, macro is far less about policy, and far more about “playing games.”

Citation

Colander, D. (2008), " Economics Confronts the Economy Confronting economists who are confronting economicsklein's", Samuels, W.J., Biddle, J.E. and Emmett, R.B. (Ed.) A Research Annual (Research in the History of Economic Thought and Methodology, Vol. 26 Part 1), Emerald Group Publishing Limited, Leeds, pp. 147-152. https://doi.org/10.1016/S0743-4154(08)26014-1