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March 2012

Macroeconomics is hard (still, yet, forever)

Arnold Kling:

Is there any chance that the dispute between stubborn Keynesians and stubborn monetarists will be settled empirically? I find it difficult to be optimistic on that score. We have accumulated more than six decades of macroeconomic experience since the end of World War II, yet neither stubborn Keynesians nor stubborn monetarists have encountered any data that would make them change their minds. Instead, since 2008, the Keynesians have effectively “taken back” all of the concessions that they made in the 1970s and 1980s.