It Takes a Model to Beat a Model

Generating verisimilous and policy-relevant models of the macroeconomy in a democracy is a challenge. Three broad theoretical perspectives are considered: (A) the orthodox Keynesian Synthesis; (B) the Austrian response; and (C) the Public Choice response. The orthodox view is inaccurate, but has the advantage of being “a model.” The Austrian critique, while largely correct, generates no usable political advice. The Public Choice critique provides a model for understanding the likely form and effects of government policies. But Public Choice scholars have missed the policy thrust of Progressivism, which accounts for the problem of political equilibrium, and insulates technocratic power from voters and interest groups. Keynesian orthodoxy has consistently won because it is playing a different game.

Duke Scholars

Author Michael C. Munger Political Science