What’s Right with Macroeconomics?

What’s Right with Macroeconomics?

The Cournot Centre series

Edited by Robert M. Solow and Jean-Philippe Touffut

Global crises are very rare events. After the Great Depression and the Great Stagflation, new macroeconomic paradigms associated with a new policy regime emerged. This book addresses how some macroeconomic ideas have failed, and examines which theories researchers should preserve and develop. It questions how the field of economics – still reeling from the global financial crisis initiated in the summer of 2007 – will respond.

Chapter 1: The fireman and the architect

Xavier Timbeau

Subjects: economics and finance, methodology of economics


The disaster film The Towering Inferno (1974) is set in a newly constructed tower. The architect, played by Paul Newman, has devised a sophisticated security system that makes this tower perfectly safe, despite its great height and elegant design. Through greed, however, the building contractors and the architect’s associates have not followed the requirements and recommendations of the architect. Since the technical specifications have not been respected, the tower is going to become a death trap. Boldness becomes arrogance, and the folly of man leads to a tragic fate. When the fire breaks out, the first reaction is to blame the security system for being defective. The design of the tower is so remarkable, however, that a fire is quite simply impossible, and the monitoring system is really only there to reassure the sceptics. A second character then comes on the scene. This is the fire chief, played by Steve McQueen. For him, no design is infallible, however advanced it may be. Each fire is unique, and must be fought, at the risk of his life, in this case because 150 people are trapped at the top of the tower and need to be saved.

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