The Methodology of Modern Macroeconomics and the Descriptive Approach to Discounting

Critics of modern macroeconomics often raise concerns about unwarranted welfare conclusions and data mining. This paper illustrates these concerns with a thought experiment, based on the debate in environmental economics about the appropriate discount rate in climate change analyses: I set up an economy where a social evaluator wants to determine the optimal time path of emission levels, and seeks advice for this from an old-style neo-classical macroeconomist and a new neo-classical (modern) macroeconomist; I then describe how both economists analyze the economy, their policy advice, and their mistakes. I then use the insights from this thought experiment to point out some pitfalls of the modern macroeconomic methodology

Wealth and welfare,

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Principles & methods of industrial peace,

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Unemployment,

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Robert Browning as a religious teacher, being the Burney essay for 1900.

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Industrial fluctuations,

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The political economy of war,

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