From Matt Rognlie, an interesting point:

"A few years ago, I read an aside in Stiglitz’s Nobel autobiography that really shook me:

Economists spend enormous energy providing refined testing to their models. Economists often seem to forget that some of the most important theories in physics are either verified or refuted by a single observation, or a limited number of observations (e.g. Einstein’s theory of relativity, or the theory of black holes).

I really think that this is true: we often do very complicated, nontransparent estimation and testing of models, when in reality one or two carefully selected stylized facts could be much more decisive."

That from here, a debate between Rognlie and Miles Kimball on sticky prices and wages.

 

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