From The Enlightened Economist:
I’ve been reading an article by Joseph Stiglitz whose title made it sound very promising:Rethinking Macroeconomics: What Failed And How To Repair It.
His work on how information asymmetries and uncertainty shape institutions and markets make Stiglitz a strong candidate for setting out a new approach to macroeconomics. And it’s needed. Standard macro has failed, even though many macroeconomists who have invested so much in their human capital are understandably reluctant to agree.
Even with modifications such as heterogeneous agents (ie people who are not all identical) and, the standard Dynamic Stochastic General Equilibrium model is not an empirically or theoretically useful representation of an economy.
I was disappointed with the Stiglitz article, however...