Speaker：Hans-Michael Trautwein

Time: 9:00~10:30am,Thursday, November 28, 2019

Site：EMS A208

Abstract: The dominant modelling strategies in current macroeconomics (often described as New Keynesian Economics) are based on dynamic stochastic general equilibrium theory (DSGE). In the wake of the global financial crisis of 2007-09, the DSGE approach has been criticized as being hopelessly inadequate for dealing with financial crises of the type that we have seen in recent years. More generally, it is seen as fundamentally incapable of dealing with failures of the intertemporal price mechanism to coordinate investment and saving. However, the 'financial frictions' literature has made considerable progress in using DSGE frameworks for modelling (shadow) banking, credit cycles and financial crises. This paper provides an assessment of what has been achieved by the reformulations of the DSGE approach and what inadequacies remain in the light of the past evolution of macroeconomic thinking and present-day critique of DSGE.

Introduction to the Speaker：

Hans-Michael Trautwein is Professor of International Economics at the Carl von Ossietzky University of Oldenburg in Germany. He has recently served as Director of the Centre of Transnational Studies (ZenTra) of the Universities of Bremen and Oldenburg, and as President of the European Society for the History of Economic Thought (ESHET). Trautwein´s research interests comprise studies of international integration and transnational governance, and the evolution of macroeconomic thinking. Trautwein has published widely in international journals and collected volumes.