I’m reading Vela Velupillai’s “Variations on the Theme of Conning in Mathematical Economics” (2007), which is one of his many contributions on the subject of the pathologies introduced into economic theorizing by insisting on the sole use of axiomatic mathematics (this is the kind of mathematics we think of when we think of mathematics, whereby the Axiom of Choice and the Law of the Excluded Middle holds. For more on this, see my post).
Standard macro theory is a linear aggregation of (axiomatic math-based) micro theory. Its descriptive power suffers from both its presumed linearity and its roots in axiomatic math. But that might not be the real issue. The real issue may be that students are not instructed on how problematic a linear, axiomatic macro might be to the descriptive, predictive, and prescriptive powers of their models. That, in effect, they’re being conned into believing standard macro methodology is the only methodology available to model macro systems, and that it’s just a matter of generating complicated enough systems of equations to get at the heart of real macro dynamics.
My question, on the back of Prof. Velupillai’s article about conless mathematical economics, is what would conless macroeconomics look like? The prevalence, indeed, the routine nature of nonlinearity and feedback effects in social dynamics would seem to preclude a linear aggregation of presumptive equilibriating micro states. Given the likelihood of undecidabilities at more complex levels like the social level, standard macro methodology has two big strikes against it. There are more strikes against standard macro methodology in the form of blatantly ignoring non-trivial fundamentalities of social systems, such that actors are not homogeneous and social networks matter, to name a few. You don’t have to poke around its structure for long before standard macro theory starts looking like a house of cards. A con, that only works given fundamentally wrong assumptions about human behavior and emergent social behavior from the interaction of many individuals.
So, again: what would a conless macroeconomics look like? I have some ideas that I will outline in future posts, but I’m curious as to what you think.