The end of economics as we know it
- 26 June 2012
Guest post by Ian Fraser
I don't know if it is just me, but I am increasingly detecting parallels between the Laputans so amusingly portrayed in Swift's 1726 satire and today's neo-classical economists. It's not just that their island floats in the sky at varying heights above the real world but also because they are so obsessed with beautiful equations, relating to theoretical maths, science, music, and technology that they are incapable of putting their wonderful knowledge to any practical use.
These economists have played a key part in shaping our macroeconomic policy and, to a large extent, guided the trajectory of global finance for the best part of three decades.
There is now a growing clamour of dissent from a group of ‘new economists' who are calling time on neoclassical economics and shaking it right down to its Laputan foundations.
This series is written for those who would like an introduction to the key players in this bid to define a new economic paradigm that takes more of the real world into account.
- What is happening to and in the economy of Ukraine?
- Should the UK lower its inflation target to help real wage growth?
- European real estate could return 7% a year but deflation remains a threat
- Why are the rail companies allowed to use a redundant (and higher) inflation index to set fares?
- Insurance costs drop 7% but consumers need to move quickly to get the best prices
- Mindful Money's weekly share watch: Persimmon, BHP Billiton, Home Depot & AGA Rangemaster
- Is it time for investors to once again look at UK banking stocks?
- Japanese QE still isn't working
- Risky AIM shares prove to be a young investor's game
- CPI inflation falls to 1.6%. Pound falls as rate rise now seen as very unlikely this year