Macroeconomists Love Stochastic Calculus Porn

Further to my entertaining, video clip “Global Financial Crisis in the words of Black Swan author”. Here is Arnold Kling’s concluding remarks in his “Economists with Pseudo-Knowledge” (emphasis added),

I have always thought that the issue of the relationship between financial markets and the “real economy” was really deep. I thought that it was a critical part of macroeconomic theory that was poorly developed. But the economics profession for the past thirty years instead focused on producing stochastic calculus porn to satisfy young men’s urge for mathematical masturbation.

Economists ought to admit that we do not know much about what is going on today. Neither do the Fed Chairman and the Treasury Secretary. Of course, the market demand is for “strong” leaders and for “strong” economists, who can fool the public into believing that they have great knowledge. The ones who do this best are those who have fooled themselves.

HT: Gary Shiu