Are There Practical Applications To Economic Theory?

Noah Smith is a young economist who is just finishing his PhD. He writes interesting articles about the practical value of the theories that he has spent considerable time learning.  In this article he makes an effort to argue that game theory may have some practical applications to the real world.  In doing so he seems to have relegated the dominant macroeconomic theories to the waste basket.  Rational expectation theory, for example, is primarily interesting because it is logically consistent, and lends itself to mathematical modeling.  It is not defended by claims of usefulness.  On the other hand, its proponents are critical of economic theories that lack the mathematical rigor of rational expectations theory.  They refer to such theories as merely hand waving.

Two of the major economists, whose writings are critically debated today, Keynes and Hayec, have different political ideologies, but they both regard economics as a critical way of thinking about the practical problems of political economy.  Neither of them would applaud the development of economic theory that was primarily valued for logical consistency and mathematical rigor.