Expounding...

...on the previous post...point 5 from Oliver Blanchard's (he has high ranking in the macro community as being a textbook writer and mathematical expositionist) "9 Things we learned at some conference for macrotheorists" (or something like that) The questioning of assumptions rarely comes up when priesthood cabals gather. Hilarity ensued given that some of the basic definitions used constantly in macrohackbabble talk, such as "liquidity", does not have a precise definition.

5. We may have many policy instruments, but we are not sure how to use them. In many cases, we are uncertain about what they are, how they should be used, and whether or not they will work. Again, many examples came up during the conference.

•We don’t quite know what liquidity is, so a liquidity ratio is one more step into the unknown.
•It was clear that some people believe capital controls work and some don’t.
•Paul Romer made the point that, if you adopt a set of financial regulations and keep them unchanged, the markets will find a way around, and ten years later, you’ll have a financial crisis.
•Mike Spence talked about the relative roles of self-regulation and regulation. Both are needed, but how we combine them is extremely unclear


another "oops, my bad" (in the sense that the body of "knowledge" he thought was "knowledge" turned out to be a bunch of hand waiving and useless graphs)