Two pointers from Mark Thoma.

1. Simon Wren-Lewis writes,

An alternative and I now think better, vision would give more emphasis to how economics developed. Economic history would play a central role. Economic theory would be seen as responding to historical events and processes. For example placing Keynesian theory in the context of the Great Depression is clearly useful, given the events of the last five years. I think it is also important to recognise the links between economic theory and ideology. This is partly to understand why governments might not act on the wisdom of economists, but it also leads naturally to recognising that economists need to adapt to the social and political context in which they work. We should also be more honest that our wisdom might be influenced by ideology. Given the limits to experimental and econometric evidence, but with a very clear axiomatic structure, methodology is always going to be an important issue in economics.

Which reminds me, I need to recover the momentum on the book I am writing.

2. Miles Kimball and Noah Smith write,

Patrick Kehoe, one of the economists dismissed from the Fed, is a key figure in a school of economics called “Freshwater Macroeconomics” (the other, Ellen McGrattan, is his frequent co-author). The labels “Freshwater” and “Saltwater” go back to the arguments and new ideas generated by the double-digit inflation in the 1970s.

I wrote about this conflict over a decade ago. Back then, I considered myself on the freshwater side. Now I am more “a pox on both your houses.”

Kimball and Smith describe the appeal of each school of thought. My book will attempt to do that, also. But I also will explain why I came to reject both schools and instead turn to PSST.