For a current research project I am looking at some more advanced macro models. As a result I ended up looking at Gali's 2008 textbook on amazon after finding one of the models from the book set up for Dynare.

Being a brave internet warrior, I waded into the one star reviews, which led to this gem. I don't know if it was just the random Austrian texts that got me, or also citing illustrious scholars such as Taleb in his blazing review. I also found it fun looking at some of the other reviews he did, and wondering what exactly led him to choose Gali's "Monetary Policy, Inflation, and the Business Cycle" as his choice of modern Keynesian macro texts to lambaste.

For those not willing to go to Amazon directly, here it is the comment, excluding hyperlinks and his reply to a brave responder in which he judges Man, Economy, and State as higher of scientific rigor than modern macro.

Let me begin with the good. Jordi Gali is obviously a talented writer who is very intelligent and capable of logical reasoning in the field of economics in general and monetary policy in particular. For a Keynesian he writes quite well and tries to be as clear as he can be, even though the book is written for a high level reader who is capable of dealing with a lot of jargon and wade through muddled language that is often used by authors who do not really know as much about the subject at hand as they think they do.

But the problem is that no amount of intellect and logic will help move forward an argument that is based on a false set of assumptions. For example, Mr. Gali seems to have no trouble with a secretive group of men meeting behind closed doors and decide what the interest rates should be. He has no trouble in policy wonks at the Treasury and Fed conspire to set monetary policies that would distort the market and create bubbles that end badly. He has no idea that the very ideas that he espouses are leading the US dollar towards the monetary graveyard that claims all fiat currencies.

No amount of mathematical manipulation will change the reality that Mr. Gali seems to wish to model. Human beings are not bullets shot out of a gun or falling water droplets. Unlike inanimate objects, they have an ability to respond to stimulus and will take steps to deal with anything that bureaucrats and central planners throw into the mix. Unless they are trying to pursue careers that need the type of muddled thinking that this book provides I could not recommend to readers strongly enough to stay away from it. Instead I will offer alternative recommendations that would be far more useful in understanding reality. In no particular order here they are:

The Theory of Money and Credit

Money, Bank Credit, and Economic Cycles

Ethics of Money Production

Man, Economy, and State with Power and Market - Scholars Edition

I would also like to add a few more recommendations that will shed a lot more light on the subject of the credibility of those pretending to be able to effectively model dynamic non-linear systems.

The Black Swan: Second Edition: The Impact of the Highly Improbable: With a new section: "On Robustness and Fragility"

The Misbehavior of Markets: A Fractal View of Financial Turbulence

Fractals and Scaling In Finance: Discontinuity, Concentration, Risk

Let me be clear about this review. We all have opinions and are all able to spin narratives to defend those opinions. But unless our defense is linked to empirical evidence or the ability to make accurate predictions about what is likely to happen our opinions are useless. I would like to go on record and predict that the Keynesian and Monetarist bureaucrats who have been driving economic policies for the better part of the last 50 years around the world will fail to solve the problems that their own meddling have created. If one steps back far enough it is easy to see that we are nearing the end of the grand experiment that began last century. All currencies around the world are fiat and all financial systems depend on fractional reserve banking that needs more and more money printing. With national debt levels being as high as they are and most countries having massive unfunded liabilities it is clear that we will see monetary policy failures across the board. Sovereign debt risks are extremely high and countries with large USD reserves are looking at ways to hedge their holdings. It would not surprise me to see that, thanks to the type of thinking that Mr. Gali represents, we could see massive devaluations and the eventual end to the forty year fiat experiment. Anyone who skims or reads through Mr. Gali's book and figures out that the New Keynesianism is no better than the original version or the previous versions of New Keynesianism should run to a bank and take out insurance in the form of the market's choice of money. Buy some gold and silver bullion, sit back, and enjoy the fireworks that we are going to witness over the next few years.

I now wonder if there is some sick underworld is bad-rating amazon reviews for otherwise interesting academic texts. Given these two star reviews for Woodford's "Interest and Prices" I'm going to say "yes."