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Frontiers of Economics in China

ISSN 1673-3444

ISSN 1673-3568(Online)

CN 11-5744/F

Postal Subscription Code 80-978

Front. Econ. China    2019, Vol. 14 Issue (2) : 149-167    https://doi.org/10.3868/s060-008-019-0009-3
Orginal Article
An Agenda for Reforming Economic Theory
Joseph E. Stiglitz()
Business School, Graduate School of Arts and Sciences (Department of Economics) and School of International and Public Affairs, Columbia University, New York, NY 10027, USA; Chief Economist of The Roosevelt Institute
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Abstract

In this article, Nobel Prize Laureate Joseph Stiglitz argues that the standard macro-economic paradigm has failed not only to predict the crisis but also to provide insights into the design of a regulatory framework that would make a recurrence less likely. He points out that many of the underlying assumptions of the standard paradigm always seemed implausible and many of its predictions, such as those concerning the micro-economic behavior of the constituents (firms and households), are inconsistent with the empirical evidence. He then identifies a number of key modeling challenges, what he views as key ingredients that have to be incorporated in any model that is going to describe economic fluctuations or be the basis of a well-designed regulatory or monetary framework.

Keywords macro-economic models      market failures      financial crises      systemic risk      regulatory framework     
Issue Date: 17 July 2019
 Cite this article:   
Joseph E. Stiglitz. An Agenda for Reforming Economic Theory[J]. Front. Econ. China, 2019, 14(2): 149-167.
 URL:  
http://academic.hep.com.cn/fec/EN/10.3868/s060-008-019-0009-3
http://academic.hep.com.cn/fec/EN/Y2019/V14/I2/149
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