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Working Paper 261 - Post-Macroeconomics: Some Theoretical and Analytical Issues


In his 1974 Nobel Prize lecture titled “The Pretence of Knowledge,” Friedrich von Hayek chastised his fellow economists about their love affair with analytical approaches that mimicked physics or biology, especially after their discipline had “been conceded some of the dignity and prestige of the physical sciences.” He argued forcefully and convincingly that some of the gravest errors of economic policy are a direct consequence of this scientistic error.” (von Hayek, 1974) Decades later, his criticism of economic methodology, in general, is still valid and has been endorsed by a wide range of economists, including some of the most influential in the field (Krugman, 2008; Solow, 2008, 2009; Caballero, 2010; Stiglitz, 2010).

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