08 On Why His Ideas Were Not Taken Up

The transcript discusses the intellectual situation in the 1960s and 70s, highlighting the disconnect between Keynesian macro analysis and price theory taught in graduate schools. Despite this discrepancy, people accepted and adopted policy analyses that didn't align with economic theory. The discussion touches on macroeconomics as general equilibrium with price rigidity and the use of rhetorical devices to communicate complex ideas. It also addresses the misinterpretation of economic models, particularly in the context of Keynes' work, and how these misunderstandings persisted in the profession for decades.

What was the main disconnect in economic theories during the 1960s and 70s?

• Theories of supply and demand

• Keynesian macro analysis and price theory

• Microeconomic and macroeconomic policies

• International trade and domestic policies

Why were people satisfied with macroeconomics as general equilibrium?

• It was easy to understand

• It was believed to have one price that wouldn't adjust

• It was widely accepted by all economists

• It was the only theory available

What rhetorical device was used to explain the economic concepts?

• Metaphors

• Days of the week

• Analogies

• Historical references

What issue did the determination of the overall price level and money face?

• It was universally accepted without question

• It was not relevant to the economy

• It occupied a different conceptual universe from relative prices

• It was too complex to understand

What was the impact of misinterpretation on the economic profession?

• It had no significant impact

• It grasped the entire profession for decades

• It was quickly resolved

• It led to new economic theories