Finally, a sluggish adjustment of real wages adds a further complication to the policy trade-off in the face of an oil price shock: a higher price of oil increases real marginal costs and thus inflation as long as the necessary decline in real wages is not brought about.
Some of this criticism has been to the point, some of it unwarranted. There is pertinence in the concern about the overly narrow focus of economics education. Economic policy-making needs high quality economists, capable of trustworthy analysis. This is why the question is important. But what makes a good economist? Keynes wrote in 1924: “…the master-economist must possess a rare combination of gifts.