Macroeconomics is no longer good enough

The world today is simply too complex for economists to comprehend in real time

In June this year, Tamil Nadu announced the setting up of an Economic Advisory Council to Chief Minister M K Stalin, which included high-profile names such as former Reserve Bank governor Raghuram Rajan and former chief economic advisor Arvind Subramanian. The hope is that the Council’s advice will “revitalise the state’s economy and ensure the benefits of economic growth reach all segments of society.”

Two months later, Finance Minister Palanivel Thiaga Rajan produced a white paper calling for a rationalisation of subsidies and “urgent course correction” so that the state’s deteriorating finances can be put on an even keel. But, without