William A. Barnett discusses the status of macroeconomics as a science in his foreword to Apostolos Serletis’s book, Money and the Economy. He says:

” Over the past 50 years, the frequency of changes in the choice of policy instruments and policy designs by the world’s central banks have been astonishing. There has not been a clear trend in any one direction, with reversions to some of the oldest approaches being common and frequent. Is this science, or is this politics? If unanticipated shocks to the economy were to cause unemployment to rise dramatically, would the currently spreading fashion of targeting solely inflation continue? If unanticipated shocks were to cause a return of double digit inflation, would the current emphasis on interest rates rather than on monetary service flows continue? Is it really true that monetary quantity is harder to measure than the “natural” or “neutral” interest rate needed in Taylor rules? Is the economy so simple that all that is needed to conduct monetary policy is an interest rate feedback rule, a Phillips curve, and perhaps one or two other equations? With all economic theory being nonlinear, is it reasonable to believe that estimated or calibrated models should be linear?2 Is it reasonable to believe that macroeconomic policy has no distribution effects, as is commonly assumed in macroeconomic models, despite the fact that most politicians advocate macroeconomic policies based precisely upon their distribution effects? If there are no such distribution effects, why is there such a strong correlation between macroeconomic policy advocacy and political party affiliation? Is it reasonable to continue to assume that monetary assets yield no own-rate of return, as assumed in many demand for money functions, despite the fact that currency and non-interestbearing demand deposit accounts have not dominated the money supply for over a half century?“

To read the full paper click here.