I have observed and appreciated Olivier Blanchardâs intellectual journey over the last decade. It began in August 2008, with what must be regarded as one of the worst-timed papers in the history of economics. In a survey of macroeconomics entitled âThe State of Macroâ, he concluded, one year after the financial crisis began, that âThe state of Macro is goodâ (Blanchard, 2008). However, Blanchard did not remain locked into that position, and he had the rare intellectual courage to say so in public and in academic papers. His most recent post, before the one I am responding to today (âFurther Thoughts on DSGE Models: What we agree on and what we do notâ), stated that, far from the state of macro being good:
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