Do Economists Understand the Economy?

Lance Taylor explains how missing the big picture is too common in the field.

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From the collection: #INET2017


From the collection #INET2017

Lance Taylor, Professor Emeritus at The New School for Social Research, has focused on the reconstruction of macroeconomic theory and seeks to challenge mainstream approaches.

Taylor argues that macroeconomists have not typically understood the unpredictability of human behavior, how social institutions interact with the economy, or the inability of markets to self-correct. Microeconomists, he contends, tend to omit important issues, like economies of scale. On the topic of inequality, Taylor points out that economists focusing on supply side models don’t address important questions, such as why CEO pay has skyrocketed or why real wages have not kept up with productivity growth. What will happen down the road if economists and policy makers don’t get it right?

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