Your quote on Keynes was at the start of your post, I took this as the context for what was appropriate. You clearly defined it as a “pre-Keynes bad” vs “Keynes good” argument from early in the post just so you could fit a narrative that played into that when discussing the book.

However, I think the core of our disagreement is in the second part – as you say.

This comes back to definition for me. You are defining macro solely as the policy prescription we’d give in the fact of a large shock, given we can observe a large shock.

I would say that macro is viewed as much larger than that by a lot of the discipline, and as a result “big ideas in macro” should discuss the understanding and expression of policy during “normal” times.

Now, if the critique is specifically about appropriate macro tools in the face of a shock then we need to ask:

1) Can we observe the shock in real time

2) Do we understand the treatment for the shock, if we can observe it

Which one we’ve “failed” at is an important question – one is a failing of data and identification, another is a failing of theory.

The medical analogy is an apt one. However, we can’t just pick out the idea of “treating someone when they are measurably sick” and comparing that to economics. We have the issues of identifying illness. The issues of appropriate treatment. The issues of subjective wellbeing which is unobservable to the doctor.

There are significant moral and ethic arguments in medicine even now – and in the past (both they could do significant randomised trails) it was argued that doctors very often did more harm than good. As a result, doctors focused on the idea of “first do no harm” – a very conservative principle.

Economics is an even more complicated science in many ways than medicine. And we don’t have the advantage of randomised trials. So by that very example, we should be very conservative about policy.

“If I read a book that claimed to be a guide to medicine and it consisted entirely of theoretical models of healthy people, i’d have the same reaction as I have here.”

Now if I take your exact analogy, rather than just medicine, then I view your analogy as out of place. I would expect a book on medicine to discuss a large number of COMMON illnesses, and also explain medical issues we understand. You seem to be presuming that such a book would only focus on rare illnesses we hardly understand, which would seem fairly beside the point no?

The rare and very costly condition is something it is worthwhile to invest to understand, and that is why it may be a “question we need to focus on”. But that is an entirely different issue.

On your more seriosu response, I’d pick out this point “indeed, if we want to understand what happens with a particularly large
shock, we may need to use a different set of tools. In this context if
he had said “I think this book has too little on analyzing what happens
in the face of large economic shocks (the type where assumptions about
log-linearization become too strong)”

Well, yes. Macro matters precisely when there are large shocks, and since this is one of those times, I’m unimpressed that people are still pursuing a research agenda designed in and for the Great Moderation.

If I read a book that claimed to be a guide to medicine and it consisted entirely of theoretical
models of healthy people, i’d have the same reaction as I have here.