Orthodox crisis models still measure fluctuations against rational-expectations equilibrium.

Evidence

Of course, since this is an orthodox model, fluctuations are relative to a rational-expectations equilibrium, and not of employment, income, and output. This is compounded by the fact that rational-expectations forecasts of identical agents are replaced by identical inaccurate forecasts. Whoever doubted neoclassical equilibrium would fail in a world populated by identical wonky forecasters? — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 2208

Categorization

• XREF: Connects to the broader argument about how orthodox economists absorbed ‘neglected risks’ models without abandoning equilibrium — complements the chapter 2 treatment of the EMH and the thought-collective thesis. — connects to: Orthodox economics models structurally excluded the possibility of major crises — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 491; The crisis exposed an epistemological contradiction festering inside orthodox economics — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 619; Post-crisis attempts to make DSGE models realistic are self-contradictory — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 801 (+1 more)

Broader Connections

• Orthodox economics models structurally excluded the possibility of major crises #expands (0.78) — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 491
• The crisis exposed an epistemological contradiction festering inside orthodox economics #expands (0.75) — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 619
• Post-crisis attempts to make DSGE models realistic are self-contradictory #expands (0.72) — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 801