The top Keynesians during the “great synthesis” came from Berkeley and MIT (“saltwater macroeconomics”).
Fair enough, so now research that was done over 50 years ago is indicative of modern trends in economics.
No it doesn’t
Does too!
But seriously, it does, and the researchers in these places are pretty explicit about it. In fact, GMU, WVU and Suffolk all specialise in both Austrian economics and Public Choice if I’m correct (GMU also has researchers in law and economics and experimental economics, not sure about the other two).
Buddy, I don’t know how many times I have to say this, but you’re conflating the political philosophy of Austrian economists with their actual work on economics. Milton Friedman’s “Free to Choose” is not, in anyway, connected to his version of the quantity theory, or the interest elasticity of demand for money. Ludwig von Mises’ “Liberalism” is not, in anyway, connected to his regression theorem or his pure time preference theory of interest. You made an assertion that is simply incorrect and I have revealed a flaw in your logic. Murray Rothbard is, potentially, a special case and the exception.
I chose to correct this mistake because newcomers, after reading your ill-informed comments, may walk away with the impression that AE is inherently political/not a serious economic school of thought.
I’m really not, I didn’t even mention Mises’ Liberalism in my last post. I mentioned current research being done in Austrian economics, of which that going on at GMU, Suffolk and WVU should be considered indicative. I agree, by the way, that Mises’ Liberalism is a piece in the liberal tradition of political philosophy (and as such is analogous to Free to Choose), but his Socialism is clearly a piece of work in positive political economy.
Much current research in Austrian economics uses insights from PC and other disciplines (a lot of sociology).
By the way, I’d seriously like to know why you’re being so obtuse on the issue. You’ve been constantly moving the goalposts. I’m not suggesting that Austrian economics isn’t serious because a lot of researches within the tradition work on political economy, I have an interest in that area too.
What bothers me about behavioral economics is the big risk of social enginering and confusion between cause and consequence. For example, a central bank may try to use BE to try to forge print money and give cheap credit without people acting “too irrational”. Like how to keep a horse following a carrot but keeping the horse from rushing til it collapses.
So, just like neoclassical/keynesians used lame math to justify social enginering, the BE camp may try to justifie it with lame psychology.
It is economics insofar as it qualifies theoretical conclusions; that is, if labor markets don’t clear due to psychological biases (e.g., downward nominal wage rigidity), then that is a real-world phenomenon not directly revealed by praxeology or neoclassical thinking.
downward nominal wage rigidity no more ‘stops’ the labour market ‘clearing’ than reservation demand on the part of producers stops any other market from ‘clearing.’
If workers demand a psychological sense of “fairness” during a deflationary turn and an employer would rather fire some workers rather than lower wages uniformly (which could hurt morale and hence productivity), then wages are above market-clearing equilibrium.
its above what the market clearing equilibrium would be in a world the same but for the absence of those particular valuations that you describe. but what about the world it is in?
nirgrahamUK, due to your philosophic commitments, you pretend as if conditions can never be improved to more efficient outcomes. You remind me of George Stigler insisting that even the US sugar subsidy was efficient (pace Posner).
My point is simple: mutually beneficial trades that could have been made, were not. Not due to coercion, but due to psychological quirks.
…due to one party of the trade making the valuation that the trade would not be mutually beneficial.
It seems clear from your confusion here that ‘neoclassical economics’ has put you in a mess . This is what happens when you don’t distinguish praxeology from thymology;applied economic analysis falls apart.
I was being rhetorical. I imagine libertarians are unanimous in their opposition to minimum wage legislation.
Here’s my point: the consequences of that legislation and the situation I first presented are identical: wages are higher than they ought to be, creating unnecessary unemployment.