I've recently started my PhD and upon looking at my textbook (the sargent one) I found that it differed greatly from my Masters textbook (Romer) and in turn my undergraduate macro text (williamson).

What is perplexing is that for the most part the models taught in all three books deal with key questions of economic growth, labor markets and business cycles. However the approaches are very different and dont necessarily feed into eachother almost like each model stands on its own disregarding the method of the previous.

This is not my experience with micro, where it was very clear that more and more depth is uncovered using the same core models of consumers, firms and market structures.

This all being said, though i recognize the value of being exposed to so many different models as part of my academic training, holding them all on the same scale when analysing a phenomenon can be at times contradicting (i.e comparing the insight from infinitely lived households to overlapping generations models).

Bottom line: why are there so many different macroeconomic models that explain the same phenomenon.

  • $\begingroup$ First of all, I am big fan of your YouTube videos, have learned a lot. Coming back to your question, there are many schools of thought in macroeconomics and each explain the same phenomenon using different variables they believe to be useful. Macroeconomic models are more of a question of idealogy than which model is better. Hope this was what you were asking for. $\endgroup$ – Elina Gilbert Aug 22 '19 at 0:38
  • $\begingroup$ @ElinaGilbert Thank you for the kind words I appreciate it! I think these models however tend to be non-ideological encorporating many elements from differing schools of thought. Particularily placing emphasis on economic growth first and then following up with welfare implications rather than the other way around (which both keynesians, austrians, marxists all focus on first then move towards a theory of growth). $\endgroup$ – EconJohn Aug 22 '19 at 3:19
  • $\begingroup$ If I understood well your question. I can say that business cycles and growth are completely different subjects. Business cycles focus on short term dynamics, however growth is a long term issue. By the way, there is another competing theory to business cycles whih is disequilibrium theory pionnered by Edmond Malinvaud and Jean Pascal Bénassy in France. These are two different approaches for the same topic. ILA models and OLG models are different as well. Especially, for issues like intergenerational equity, you should use an OLG model (except the famous ReStud paper of Solow in 70s). $\endgroup$ – optimal control Aug 22 '19 at 21:57
  • $\begingroup$ @optimalcontrol malinvaud has a business cycle theory?? I thought he was a microeconomist. Can you link me the paper? $\endgroup$ – EconJohn Aug 22 '19 at 22:00
  • $\begingroup$ He was a macro guy and quite famous in academia in France. He has a considerable amount of work about these topics. You can find them on Google. $\endgroup$ – optimal control Aug 24 '19 at 13:16

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