Morgan Reynolds on the Trouble with Modern Macroeconomics

In his recently published "The Poverty of Modern Macroeconomics and Power of Austrian Business Cycle Theory," Morgan O. Reynolds, professor emeritus of economics at Texas A & M University, does a masterful job highlighting the weaknesses in analysis of our economic banana by macroeconomists of various economic stripes. He documents the explanations given by eminent scholars such as Alan J. Aeurbach, John Taylor, Martin Feldstein, Gary Gorton, Frederic Mishkin, and others, noting that none of their explanations are satisfactory, because they fail to explain the cause of and hence property remedy for the Great Recession.

The article is highly recommended for those interested in seeing the poverty of modern macroeconomics in action.When citing the reason for such intellectual barrenness through much of modern macro, Reynolds quotes the late Larry Sechrest, "Without a sound capital theory, macroeconomics is incomprehensible." Indeed.