In this episode of “Where is the General Theory of the 21st Century?”, we talk to Professor Lawrence J. Christiano, chairman of the Department of Economics and Professor of Economics at Northwestern University and one of the leading researchers in Macroeconomics and DSGE models.
“Where is the General Theory of the 21st Century?” is an interview series that explore the evolution of macroeconomics academia since the Great Recession.
Do we have some revolutionary changes in the macroeconomics after 2008, just like we had had the “Keynesian Revolution” after the Great Recession? Why haven’t economists come up with a new General Theory after the Great Recession? Our in-depth interviews with influential economists will provide answers to these questions.
In this interview, Prof Christiano shared his view on the development of post-2008 academic macroeconomics.
We’ve asked Prof Christiano does he agree that modern macroeconomic models are too complicated for the general public, or even policymakers and if he agrees that economic models should be “simpler”? Should Macroeconomists hang on their faith in DSGE models? Should they explore alternative paths?
(The transcript is edited for clarity. All mistakes are ours. Cover Photo Credit: IMF Youtube Channel)