On the value of macroeconomics

Of course, you need to accept some version of the efficient markets hypothesis for this to be true (ie, that in markets prices reflect the information available to the participants in said market, to use a very weak EMH version):

The key indicator of scientific progress is not the opinion of a seasoned practitioner (with their clear bias), but rather, do large financial institutions, who would really benefit from being able to forecast the economy, have thriving economics departments, with the best macroeconomists moving in and out as Chief Economist of Citigroup, to Harvard, and back? No.

Macroeconomists are demonstrably not helpful to those institutions that could use economic expertise. Macroeconomists know a lot of stuff, just not anything useful.

But then just about everyone agrees that the weak EMH is indeed valid.

2 comments on “On the value of macroeconomics

  1. Banks and oil companies do tend to have economics departments and chief economists. (eg Christof Ruehl at BP, Dean Maki at Barclays both of whom have published academic research). They also tend to be, despite the credit crunch, among the most profitable companies around. Maybe the problem is not that macroeconomics is useless, but that many companies outside these sectors fail to appreciate how useful it can be?

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