Whatever happened to stability analysis? « Learning Political Economy - 0 views
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Giorgio Bertini on 20 Jun 11Maintaining ignorance about the limitations of stability theory comes in handy when perpetuating the mythology of market theory. As Mundell once remarked, stability analysis is the most successful failure of general economic theory. It is also the best example of how an academic community pushes the most serious problems of mainstream theory under the rug and gets away with it. Students should learn to look under the rug. The ability to improve our understanding of economic processes depends on efforts to uncover the failures of mainstream theoretical constructs.