Stinson Analytical had its genesis in the financial panic of 2008. Few events have demonstrated more clearly the failure of modern economics than that crisis, the enormous dislocation it caused and the complete disarray in which it has left mainstream macroeconomists.
Things we thought we knew were suddenly no longer certain. Long-discredited policies were hurriedly resurrected. Well-established policy mechanisms ceased to be effective. Policy-makers resorted to the unconventional. Stability dissolved overnight.
In sorting through the wreckage, many of us encountered, for the first time, once-prominent theory and economic history that seemed very relevant to the crisis, but which called into question the more recent orthodoxy. We were surprised by the almost complete absence of these ideas from our economics training. Our confidence in what we had been taught, and in the basis for determining what we had been taught, was undermined.
Something was clearly very wrong with “standard” economics. Perhaps, beneath all the advanced technique and the appearance of sophistication, some fundamental elements had been overlooked. Perhaps the failure did not occur despite modern academic method, but because of it.
And perhaps, if things had been overlooked in macroeconomics, there were things that had been overlooked elsewhere.
17 November 2016