Things That Never Happened In The History Of Macroeconomics

Some clarification from Dr. Krugman - follow link to original
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Things That Never Happened In The History Of Macroeconomics

Via Mark Thoma, David Warsh finally says what someone needed to say: Friedrich Hayek is not an important figure in the history of macroeconomics.

These days, you constantly see articles that make it seem as if there was a great debate in the 1930s between Keynes and Hayek, and that this debate has continued through the generations. As Warsh says, nothing like this happened. Hayek essentially made a fool of himself early in the Great Depression, and his ideas vanished from the professional discussion.

So why is his name invoked so much now? Because The Road to Serfdom struck a political chord with the American right, which adopted Hayek as a sort of mascot — and retroactively inflated his role as an economic thinker. Warsh is even crueler about this than I would have been; he compares Hayek (or rather the “Hayek” invented by his admirers) to Rosie Ruiz, who claimed to have won the marathon, but actually took the subway to the finish line.

Now, given my criticisms of where macro has gone since the 1970s, I of all people should be careful to say that ideas ignored or rejected by the professional mainstream aren’t necessarily without value. To take the most obvious example, Hyman Minsky now looms large in many peoples’ thinking, my own included, even though he died a very marginal figure.

But the Hayek thing is almost entirely about politics rather than economics. Without The Road To Serfdom — and the way that book was used by vested interests to oppose the welfare state — nobody would be talking about his business cycle ideas