The Unfortunate Uselessness of Most 'State of the Art' Academic Monetary Economics

VoxEU, Research-based policy analysis and commentary from leading economists, March 6, 2009

5 Pages Posted: 10 Sep 2014

See all articles by Willem H. Buiter

Willem H. Buiter

Citigroup New York; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute); Columbia University

Date Written: March 6, 2009

Abstract

Standard macroeconomic theory did not help foresee the crisis, nor has it helped understand it or craft solutions. This columns argues that both the New Classical and New Keynesian complete markets macroeconomic theories not only did not allow the key questions about insolvency and illiquidity to be answered. They did not allow such questions to be asked. A new paradigm is needed.

Keywords: financial crises, insolvency, liquidity, incomplete markets, DSGE models, methodology, New Keynesian economics, New Classical economics

JEL Classification: B00, B22, B23, B49, B50, D50, D52, E00, E30, E37, E47

Suggested Citation

Buiter, Willem H., The Unfortunate Uselessness of Most 'State of the Art' Academic Monetary Economics (March 6, 2009). VoxEU, Research-based policy analysis and commentary from leading economists, March 6, 2009. Available at SSRN: https://ssrn.com/abstract=2492949

Willem H. Buiter (Contact Author)

Citigroup New York

Citigroup Global Markets Inc
388 Greenwich Street
New York, NY 10013
United States
+12128162363 (Phone)
+12128168970 (Fax)

HOME PAGE: http://willembuiter.com/

Centre for Economic Policy Research (CEPR)

London
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

Columbia University ( email )

420 West 118th Street
New York, NY
United States

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