Economics Struggles to Cope With Reality

Blame the professors, who rely on fancy mathematical models that don't describe how the world works.

Source of the breakdown.

Photographer: Kathryn Donohew/Getty Images

There are basically four different activities that all go by the name of macroeconomics. But they actually have relatively little to do with each other. Understanding the differences between them is helpful for understanding why debates about the business cycle tend to be so confused.

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