Recent controversies in neoclassical modelling and developments in Evidence-Driven Policy

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Show simple item record Nettleton, Stuart en_US
dc.contributor.editor Organising Committee en_US 2012-02-02T11:09:49Z 2012-02-02T11:09:49Z 2010 en_US
dc.identifier 2009007826 en_US
dc.identifier.citation Nettleton Stuart 2010, 'Recent controversies in neoclassical modelling and developments in Evidence-Driven Policy', , University of Sydney, Sydney, Australia, , pp. 1-30. en_US
dc.identifier.issn - en_US
dc.identifier.other E1 en_US
dc.description.abstract The use of Computable General Equilibrium modelling in evidence-based policy requires an advanced policy making frame of reference, advanced understanding of neoclassical economics and advanced operations research capabilities. This paper examines developments in the policy making frame of reference. The process of evidence-driven policy places importance on the validation of potential policies using models. At national, bilateral and multilateral levels, policy analysis has increasingly relied on neoclassical computable general equilibrium models having substantial precedence. Bayesian analysis suggests that a policy which survives a validation test using such a model has a much better chance of being successful than a policy that fails such a test. Yet the 2008-9 Global Financial Crisis demonstrated that policies verified with neoclassical models neither predicted the Global Financial Crisis nor were able to address it. Governments across the world used massive Keynesian stimulus to restabilise economies. Neoclassical models became much maligned within Keynesian and behavioural economics circles. This paper investigates the continuing role of neoclassical models in evidence-driven policy with reference to the deductivism of Sir Karl Popper and Thomas Kuhn, inductivism and the controversial objective theory of evidence. While policy making has always been messy, in recent decades policy makers may have succumbed to the human fallibility of justifying pragmatism with simplified ideological paradigms that inappropriately place over-reliance on neoclassical free market mathematical models because these models are self-reinforcing of the ideology. It is concluded that neoclassical models will continue to have a role in testing policies but those features of neoclassical models that led to the failures in understanding the Global Financial Crisis will need to be addressed. en_US
dc.language English en_US
dc.publisher University of Sydney en_US
dc.relation.isbasedon en_US
dc.title Recent controversies in neoclassical modelling and developments in Evidence-Driven Policy en_US
dc.parent 18th International Conference on Input-Output Economics en_US
dc.journal.volume en_US
dc.journal.number en_US
dc.publocation Sydney, Australia en_US
dc.identifier.startpage 1 en_US
dc.identifier.endpage 30 en_US FEIT.Faculty of Engineering & Information Technology en_US
dc.conference Verified OK en_US
dc.for 099900 en_US
dc.personcode 100621 en_US
dc.percentage 100 en_US Other Engineering en_US
dc.classification.type FOR-08 en_US
dc.edition en_US
dc.custom International Conference on Input-Output Economics en_US 20100620 en_US
dc.location.activity Sydney, Australia en_US
dc.description.keywords NA en_US
dc.staffid en_US
dc.staffid 100621 en_US

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