By Noah Smith – These days, essentially all of the pre-2008 models have fallen out of favor, replaced by models where finance is the key. Most people would agree that’s a good thing.
But those models are going to have just as hard a time getting conclusive support from the data, because there just isn’t much data.
So again, conclusions about whether the Fed should print money and buy bonds to fight recessions will come down to intuition. As Robert Waldmann says, “The models change but the policy proposals remain the same.” more> http://tinyurl.com/k2vkost