Q: What do John Maynard Keynes and Steve Keen have in common?
A: They’ve both been misread by Paul Krugman.
In just a couple of days I’ve gone from the privilege of being acknowledged by Krugman to being misread by him, in a way that would have any student failed in a multiple choice exam. In a passage where I specifically referred to DSGE models–which includes both “New Classicals” and “New Keynesians” he interpreted me as referring to New Keynesian models only.
And I said “underlying principles to the DSGE models”, which should have been enough of a clue that I was referring specifically to New Classical models, not New Keynesian ones.
The disparaging references to New Keynesian models came later, when I described them as being like Ptolemaic astronomers adding epicycles to an underlying model that couldn’t explain the retrograde motion of the planets.
Then having misread me, he concludes with “Nick uses a four-letter word to describe this; I can’t, because this is the Times”
Since I don’t work for The Times, I can and will use a four letter word to describe your poor comprehension here Paul: