An elephantine theory of depressions

In microeconomics a theory is thought to be, if not inadequate, then incomplete unless it can be interpreted as “telling a story.” Beavers and deers, perpetual plants, aging wine—these and other homely examples play a larger role in our assessment of the validity of theories than economists might want to admit. If we cannot find a plausible story, then the theory itself is often suspect. This criterion may be applied to macroeconomics too…