Michael Roberts' critique argues that this year's Nobel economics prize, awarded to Robert Hall and Michael Woodford for models helping governments and central banks stabilise the economy, is unwarranted. The Nobel Academy claimed their models provide a stable theoretical foundation and help smooth economic peaks and troughs, but the author questions whether these models have actually improved policy decisions. He traces the New Keynesian school to the failure of Keynesian macro-management in the 1970s and its shift to microfoundations and DSGE models. Roberts argues these models failed to predict the great recession (2007-09) and could not explain the weak recovery that followed.
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