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... going by content Krugman tells us that except in these very special circumstances the classical theory works.

Ha.  That sounds a lot like how Mason characterized "the mainstream".  So you would you put Krugman among that lot?

Mainstream economics had convinced itself that capitalism tends towards equilibrium; and that any shocks must be external. It did so by reducing economic thought to the construction of abstract models, which perfectly describe the system 95% of the time, but break down during critical events.

In the aftermath of the crisis - which threatens some countries with a phase of stagnation lasting decades - Minsky's insight has been acknowledged. But his supporters face a problem. The mainstream has a model; the radicals do not. The mainstream theory is "good enough" to run a business, a finance ministry or a central bank - as long as you are prepared, in practice, to ignore that theory when faced with crises.

And here I was, believing Krugman's voice to be John the Baptist's, crying in the Wilderness.

Point n'est besoin d'espérer pour entreprendre, ni de réussir pour persévérer. - Charles le Téméraire

by marco on Wed Mar 25th, 2015 at 10:14:56 AM EST
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See: Who Are These Economists, Anyway? (By James K. Galbraith, January 2010)
This article is partly a response to Paul Krugman's piece in the Sunday New York Times of September 6, 2009, on the failures of the economists in the face of the crisis. Here, Senior Scholar James K. Galbraith takes up the challenge of identifying some of those economists--the "nobodies" of the profession--who did see it coming, and who have not gotten the credit they deserve. He also points out the urgent need to expand the academic space and the public visibility of ongoing work that is of actual value when faced with the many deep problems of economic life in our time--an imperative for university administrators, for funding agencies, for foundations, and for students.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Wed Mar 25th, 2015 at 10:17:13 AM EST
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