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10/04/2012

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Daniel Kuehn

I think you're right although I'd phrase it slightly differently. It is already a science. We also all accept the Lucas Critique (I think) and we're still able to converge on at least general approaches to thinking about theorizing the economy. There is a degree of uncertainty, but competing macro theories clearly aren't equally valid. There are bad macro theories and good macro theories, and there is a decent consensus on what good macro theory is. It's not exact, but it is pretty good (the better analogy is ultimately to biology - which also has non-exact but pretty good theories - and not physics).

But you're right in that the inherent randomness means that 200 or 500 years from now when we have much better data and many more recessions, macroeconomics will be much, much better.

Daniel Kuehn

And to clarify that, I don't think the Lucas Critique and macro being a science are one and the same. That first sentence was just the first in a couple ways I would have phrased it differently from you (while maintaining the point that with more data we're going to get much better macro). I agree also that we could just be comparing rubbish, but to me it's pretty clear that's not what's going on. Science is first and foremost a method for testing theories against facts. We are clearly following the scientific method. And the products of the scientific method are doing what we'd expect them to do: getting better at explaining the world around us.

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