I have a new column:
When It Comes to Trumponomics, Economists Are on High Alert: Faith in macroeconomic models plummeted after the Great Recession, and for good reason. The models failed to foresee the economic problems that were coming, the severity of the recession was misjudged, and the models provided little guidance on how policymakers should respond to the economic crisis.
Macroeconomists have since overcome many of these problems. For example, the failure to integrate a meaningful financial sector into the models and working out how monetary and fiscal policy impact the economy when it is stuck at the zero bound. But even today, as Berkeley economist Brad DeLong points out (and as I pointed out long ago), macroeconomists cannot even agree on the importance of various explanations about the primary cause(s) of the recession.
Does that mean economics has little to offer when it comes to evaluating policy proposals from the Trump administration? Have macroeconomic models been tarnished to the point where the Trump administration can disregard economic analyses unfavorable to their proposals because the experts don’t know what they are talking about? ...