This week, Bob talks with macroeconomist Roger Farmer—who places himself “between Keynes and Hayek”—about how twentieth-century macroeconomics evolved. They discuss how overlapping generations and search theory change the story on unemployment and asset prices, and where Professor Farmer thinks both neoclassicals and MMT advocates go wrong. Farmer contrasts the old “rocking horse” vision of the economy with his preferred “windy boat” metaphor, where the economy can drift for long periods, and variables like unemployment behave more like random walks than quick returns to a single steady state.
Related:
- Professor Farmer's Article, "How New Keynesian Economics Betrays Keynes": Mises.org/HAP532a
The Mises Institute is giving away 100,000 copies of Hayek for the 21st Century. Get your free copy at Mises.org/HAPodFree
