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1 Studia Ekonomiczne (Economic Studies)

1 2009

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Do we really need to start from scratch?

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Gradzewicz M. , Makarski K. , Tyrowicz J.

Studia Ekonomiczne (Economic Studies)

2009

nr 3-4(62-63)

191-211

This paper presents views and believes of the authors on the relevance of the current economic theory for the understanding of the complex world we live in. Has the crisis indeed demonstrated that as profession we are misled by the beauty of the mathematical models and the only useful, workable solutions at hand were provided in early 1930s? The purpose of this paper is to provide a review of the current state-of-the-art literature from the perspective of its usefulness in the context of economic crises. We argue that although we might be unable to answer many questions or to “predict” crises, the path we are following is the right one. Furthermore, going back to Keynes would not solve any of the identified problems and would generate problems on its own. Analysing the state of economics after the crisis it is argued that (i) we need models with micro-foundations, (ii) we need better models with micro-foundations. Already existent and promising directions for future research are discussed.