The DSGE consensus model was a top-down compromise, not an organic agreement

Evidence

So maybe economist jokes are not all that funny, but there are a few philosophical points to be extracted from the imbroglio. The first is that, within the profession, seeking out the Golden Mean does not guarantee intellectual credibility. The DSGE model was the product of a long series of compromises resulting in what was conceived as best-practice consensus, following a period in which participants had endured what they felt was three decades of bickering, discord, and wrangling over the correct way to theorize in macroeconomics. In the middle of the noughties, embrace of the Great Moderation was coupled with declaration of the Great Macro Accord, and the DSGE model was its offspring. Complacency in the world of ideas replicated complacency in the world of policy. — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 785

Categorization

• XREF: Connects to the previous chapter’s thesis about the Federal Reserve’s outsized influence on the economics profession, which Mirowski raised as his own prior claim. — connects to: Post-crisis attempts to make DSGE models realistic are self-contradictory — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 801; Even sharp critics of DSGE refuse to reject its general equilibrium foundations — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 795

Broader Connections

• Post-crisis attempts to make DSGE models realistic are self-contradictory #complicates (0.82) — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 801
• Even sharp critics of DSGE refuse to reject its general equilibrium foundations #expands (0.78) — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 795