I find his critique of DSGE entirely convincing. However, he doesn't. He wrote " I see the current DSGE models as seriously flawed, but they are eminently improvable and central to the future of macroeconomics. "
He notes the flaws that (in my words)
1) the core assumptions are absurd and have yielded false implications (the models can be fiddled to eliminate those implications as one would expect if the approach were "a dangerous dead end").
2) After the fiddling, the models are too richly parametrised to estimate so the implications are the result of conventions and not of any interaction with reality.
3) the models have normative implications which are clearly nonsense.
and 4) only the economists who write the literature can understand it.
Sure sounds like a "dangerous dead end" to me.

  1. 核となる仮定が馬鹿げており、誤った含意を導き出している(そのアプローチが「危険な行き詰まり」であったならば、予想される通り、そうした含意を削るようモデルを弄ることができる)。
  2. 弄った後のモデルは、推計するにはパラメータが多くなり過ぎているので、含意は慣例によって決められる。現実との相互作用によって決められることはない。
  3. モデルには規範的な含意があるが、それは明白なナンセンスである。
  4. その研究論文を書いた経済学者だけがモデルを理解することができる。


He argues that one must start from DSGE because he can't think of an alternative *and* dismisses other approaches without considering them. I think that Blanchard genuinely doesn't think there is any macro but DSGE macro. I note in passing that he has friendly relations with Paul Krugman, Larry Summers and Brad DeLong.
OK his conclusion (includes) "DSGE models can fulfill an important need in macroeconomics, that of offering a core structure around which to build and organize discussions. " Krugman notes that this sounds just like the defense of Marxist theory he used to hear. I ask why the core structure couldn't be national income and product account identities and the definitions of wage inflation, price inflation and interest rates ?

*1:cf. ここ