Post Walrasian Macroeconomics

In part because it’s the sort of stuff that I’ve always been interested in anyway, in part because people like Crighton, Luke and Nic (you know who you are) have always advocated this sort of stuff and in part because it relates closely as a pratical example of my thoughts on moving the mainstream, I have picked up (well, borrowed) a copy of “Post Walrasian Macroeconomics: Beyond the Dynamic Stochastic General Equilibrium Model”, edited by David Colander [Amazon, Cambridge].

I’ve not had any serious exposure to DSGE models (LSE touches on them briefly at the M.Sc. level when giving pen-and-paper examples of Real Business Cycle Theory. It’s only at the M.Res. level (this coming year) that we get to put some teeth on it), but I’ve always been attracted to agent-based modelling in economics since I did my Computer Systems Engineering degree when artificial neural networks and the like were attracting attention.

The first 80 pages or so seem to be trying to recast the Classical economics movement of the start of the 20th Century as a precursor, not of modern neoClassical/neoKeynsian hybrids that still take formal Walrasian general equilibrium as their basis, but instead of what they call Post-Walrasian thinking, where nonlinear dynamics and the multiple equilibria they imply are entry requirements, and where institutions and nominal frictions serve to constrain the chaos instead of simply limiting the move to an intertemporal general equilibrium as they do in DSGE work.

No, I’m not sure I understand all of that either. I certainly need to find a decent (and ideally, neutral) summary of mainstream economic thought over the last century. If anybody has any suggestions, I’d be grateful.

Update: Well, it turns out that there was indeed a neoClassical/neoKeynesian synthesis, but it is by no means current mainstream thinking, which is — according the authors — described better as a New Classical/New Keynesian synthesis. More to come …

2 Responses to “Post Walrasian Macroeconomics”

  • Hi, I’m an undergrad Econs student at David Colander’s school (Middlebury College) and I’ve taken a few classes with him. I’m flipping through the Post Walrasian book right now and found it really fascinating.

    And I’m interested in Agent-based modeling as well, hopefully I can do some graduate work in the field in the future. I’d really like to get aquainted with grad students who are working in the field.

    The problem I think is that because this Post-Walrasian stuff is so new that there’s no proper grad-school programs designed for say, agent based modeling. I’d like to know more about how you think about the situation as a grad student, are there any opportunities to learn that kind of stuff at grad school?

    P.S. maybe if you have some questions about the history of 20th century macro, I can go ask Colander for you šŸ™‚

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