Will Macroeconomists Solve the Crisis?
14 July 2009 at 1:27 am Benito Arruñada 1 comment
| Benito Arruñada |
One may doubt it after observing that Ben Bernanke was one of those believing in the Great Moderation — the claim that macroeconomic volatility had been reduced. Macroeconomic policymaking seems to be as unsafe as firefighting: extinguishing small fires creates the conditions for hell. Shouldn’t macroeconomists learn something from forest management? (For a start: “Fire Must Be Ally in Forest Management.”) Of course, if coupled with an acid-suppressing pill, they could even dare to read Hayek’s “Pretence of Knowledge.”
Entry filed under: Austrian Economics, Financial Markets, Former Guest Bloggers, Methods/Methodology/Theory of Science.
Organizations and Markets 
1.
Michael F. Martin | 14 July 2009 at 10:22 am
Shouldn’t macroeconomists learn something from forest management?
The answer is most definitely a yes. You should also check out the work by Barbara Drossel on forest-fire models.
http://prola.aps.org/abstract/PRL/v76/i6/p936_1
Summary here:
http://brokensymmetry.typepad.com/broken_symmetry/2009/05/sync-and-selforganized-criticality.html