The Assumptions Economists Make

Jonathan Schlefer holds a Ph.D. in political science from MIT and is the author of Palace Politics: How the Ruling Party Brought Crisis to Mexico, as well as articles for The Atlantic and other publications. He is currently a research associate at Harvard Business School.

Not a history of economic thinkers, this is an examination of their prevailing assumptions, from Adam Smith to the present. Schlefer asserts that macroeconomic models failed to guide government policy before 2008 because economists got their neoclassical theory wrong, and he blames the economic troubles of 2008 and beyond on the instability of private financial markets. He disputes factors such as supply and demand, technology, and unionization as causes of the current recession, noting that many believed the "supply of better-educated workers increasing relative to lower-skilled workers would cause their pay premium to fall" when just the opposite happened. -- Joanna B. Conrad Library Journal 20120215 A lucid, plain-spoken account of the major economic models, which [Schlefer] introduces in chronological order, creating a kind of intellectual history of macroeconomics. He explains what the models assume, what they actually demonstrate--and where they fall short. -- Binyamin Applebaum New York Times blog 20120416 Fascinating...[Schlefer's] book is a tough critique of economics, but a deeply informed and sympathetic one. -- Justin Fox Harvard Business Review blog This book is an impressive and informative analysis of the economics literature--and it presents some useful insights about how a more eclectic, catholic approach might allow economics to progress more convincingly into the future. -- Michelle Baddeley Times Higher Education 20120419 The Assumptions Economists Make is a valuable book for readers who like to argue, reflect, and advance knowledge. -- A. R. Sanderson Choice 20120901