I had hoped to find time to offer a more thoughtful response to Simon Wren Lewis’s most recent comments on the way forward in macroeconomics but life is intruding, and I now I owe a response to Ray Fair (after I look at the work that he points to.) For now, I’ll go ahead with what I hope is a suggestion that could encourage some kind of consensus: Perhaps the discussion about macro would benefit from a distinction like the one in biomedicine between bench science and clinical work.

The people who work in the global-development-consulting-complex seem to develop a hard-wired commitment to the containment paradigm: governments should contain the size of cities. This means that governments are supposed to create an artificial scarcity of urban land. It is then an arithmetic inevitability that vast numbers of people are needlessly deprived of access to the formal housing market. Solly Angel, who leads the Urban Expansion project at NYU, describes our alternative approach as the making room paradigm: governments should make room for all people who want to move to cities.

Blogging on my side interest in macro and growth theory has been crowded out by my day job, which has me in Colombia this week. This translation of a Q&A explains why I’m here. Your academic contributions to the economy are recognized globally, but when did you start your interest in working on urbanization issues? I started thinking about urbanization in the mid-1990s when I shifted from thinking about growth for countries at the technological frontier and toward thinking about the process of catch-up growth in the developing world.

Below, my reactions to comments on my post Solow’s Choice: 1. Brad DeLong notes that work on the large simulation models continued outside of academia, so when I wrote that work on these models collapsed, I should have been sure to qualify this by saying that academic work on these models collapsed. I bet that even the private forecasters have moved away from large structural models along the lines of the 1978 Fair model, with its 97 equations, but no matter.

Several economists, including Brad DeLong and Paul Krugman, have commented on how macroeconomics developed in the late 1970s. There are many points on which we agree, and a few that merit some additional attention. Lucas and Sargent were right in 1978 when they said that there was something wrong, fatally wrong, with large macro simulation models. Academic work on these models collapsed. Lucas and Sargent were wrong when they claimed that the new type of model that they offered as an alternative already offered advice to policy makers.