Mark Thoma - Reform and Restructuring of the Financial and Non-Financial Sectors

The transcript discusses the challenges and potential solutions in modern macroeconomics, focusing on the need to address issues within the DSG models, such as aggregation problems and the integration of financial and real sectors. It also highlights the importance of developing better regulation models and explores the possibility of adopting new theoretical approaches, including complexity, networks, and reflexivity.

What is one proposed solution to address the issues in modern macroeconomics within the existing DSG structure?

• Focusing solely on microfoundations

• Ignoring aggregation problems

• Eliminating all representative agents

• Introducing new models of expectations

Why is it important to connect the real and financial sectors in macroeconomic models?

• To better understand leverage cycles and maturity mismatches

• To focus only on financial intermediaries

• To eliminate the need for regulation

• To simplify the models

What is a criticism of current regulation models in macroeconomics?

• They ignore financial sectors

• They are ad hoc and unrealistic

• They are too complex

• They focus too much on microfoundations

What role do complexity and network effects play in new macroeconomic models?

• They simplify the models

• They focus only on individual agents

• They eliminate the need for aggregation

• They help in better regulation and understanding of economic systems

What is one potential benefit of using models from softer sciences in macroeconomics?

• They offer new perspectives and approaches

• They focus solely on financial data

• They eliminate the need for complexity

• They provide a more rigid structure