Examines how the methodologies are founded in the theories of Neo-Austrian, mainstream, Post Keynesian, and Marxian economic traditions. Also describes the microeconomic foundations of their macroeconomics and their various approaches to such concepts as equilibrium, expectations, money, and macroeconomic policy. Revised from the 1985 Macroeconomic Thought: A Methodological Approach to incorporate new developments in the field. Annotation copyright by Book News, Inc., Portland, OR
Methodological practice is at the heart of divisions between schools of macroeconomic thought. Jesper Jespersen s book explains why and precisely how, and gives the reader the insight to choose between rival approaches. His own inspiration comes from Critical Realism and Popper s Three World analysis, with Keynes as the main exponent of a realist approach. The starting point of realist theory is a view of how the world is, rather than axioms, and the test is whether the theory can make, as Jespersen puts it, the round trip back to reality , to give practical guidance to policy. This is only the focal point of a rich and attractive canvas. How I wish this book had been available when I taught methodology! And how I wish economists from all schools of thought would read it! Victoria Chick, University College London, UK This welcome volume by Jesper Jespersen offers an up-to-date realist approach to macroeconomics, drawing on recent developments in methodology, notably critical realism, as well as earlier Popperian ideas. He shows how economics in the Post-Keynesian tradition, using this approach, can address the important macro policy issues, and sets out a seven-point agenda for future theory development. This book provides an important launching-off point for addressing macroeconomic questions without the need for the abstractions as narrowly rational representative agents. Rather Jespersen explores the interdependencies between the macro and micro levels in real economic processes under conditions of uncertain knowledge. Sheila Dow, University of Stirling, UK Jesper Jespersen presents a treatise on the importance of the choice of methodology within macroeconomics. Given that no scientifically based macroeconomic policy recommendation should be established without an evaluation of the methods employed, this book gives a clear exposition of how proper macroeconomic analysis should be undertaken. Furthermore, it is convincingly argued that one of the lasting contributions of John Maynard Keynes was his emphasis on methodology; that macroeconomic consequences of uncertainty could not be analysed within the established general equilibrium framework. It is due to post-Keynesian economics supported by critical realism that the understanding of Keynes s methodology has been resurrected, which has eventually resulted in renewed debate on realistic macroeconomic policies to restore full employment without inflation. Macroeconomic Methodology is an inquiry into the question of how to conduct a proper scientific analysis of uncertainty within macroeconomics. It will be of great interest to scholars of the philosophy of social sciences and methodology, as well as post-Keynesian and heterodox economists.
The Methodology of Empirical Macroeconomics stakes out a pragmatic middle-ground between traditional, prescriptive economic methodology and recent descriptive (sociological or rhetorical) methodology. The former is sometimes seen as arrogantly telling economists how to do their work and the latter as irrelevant to their practice. The lectures are built around a case study of a concrete example of macroeconomic analysis. They demonstrate that economic methodology and the philosophy of science offer insights that help to resolve the genuine concerns of macroeconomists. Some examples of questions addressed include: What is the relationship between theoretical models and empirical observations? What is the relevance of macroeconomics to policy? Should macroeconomics be viewed as a special case of microeconomics? What is the place of long-standing philosophical issues in macroeconomics, such as the scope and nature of economic laws, the role of idealizations, methodological individualism, and the problem of causality?
This book is devoted to the lasting impact of The General Theory (and Keynes’s thought) on macroeconomic theory, methodology and its relevance for understanding the post-crisis challenges of the 21st Century. A number of contributions take their departure from Keynes's presentation during the 1930's of his new macroeconomic understanding and its policy implications. Other chapters take a more pluralistic view of Keynes's ideas and their importance for contemporary debates. Further, it is demonstrated that many textbooks often misrepresent The General Theory and therefore cannot be a reliable guide to 21st Century economic policy.
That the chapters in the volume cover such a wide range of important, often fundamental, topics is a proper tribute to Basil Moore s influence and contributions over his working life. From the foreword by G.C. Harcourt, Jesus College, Cambridge, UK During a distinguished career, Basil Moore has made numerous important contributions to macroeconomics and monetary economics, and is renowned as the progenitor of the horizontalist analysis of endogenous money. More recently, he has embraced complexity theory as part of an ongoing effort to understand macroeconomics as an evolving, path-dependent process. This book celebrates and explores Basil Moore s interests in and contributions to monetary and macroeconomic theory. Complexity, Endogenous Money and Macroeconomic Theory features original essays by internationally acclaimed and expert authors. It comprises a selection of papers on five distinct but interrelated themes: economic concepts, tools and methodology; complexity, uncertainty and path dependence; the macroeconomics of endogenous money; the macroeconomics of exogenous interest rates; and unemployment, inflation and the determination of aggregate income. These papers combine to provide a comprehensive methodological and theoretical discussion of the macroeconomics of a monetary production economy. The book will be of interest to professionals and research students in the fields of macroeconomics and monetary economics especially those with an interest in the Post Keynesian approach to analyzing these fields, including the wide audience that has been reached by the contributions of Basil Moore himself.
Interpreting Macroeconomics explores a variety of different approaches to macroeconomic thought. The book considers a number of historiographical and methodological positions, as well as analyzing various important episodes in the development of macroeconomics, before during and after the Keynesian revolution. Roger Backhouse shows that the full richness of these developments can only by brought out by approaches which blend both relativism and absolutism, and historical and rational reconstructions. Examples discussed include Hobson, Keynes and Friedman.
This book examines new classical macroeconomics from a comparative and critical point of view that confronts the original texts and later comments as a first dimension of comparison. The second dimension appears in a historical context, since none of the new classical doctrines can be analyzed ignoring the parallelism and discrepancies with the theory of Keynes, Friedman or Phelps. Radicalism of new classical macroeconomics has brought fundamental changes in economic thought, but the doctrines got vulgarized and distorted thanks to the mass of followers. Nowadays, economic theory and policy, trying to find their ways, have a less clear relationship than ever. Therefore, this volume is aimed at mapping and reconsidering the policy instruments and transmission mechanisms offered by the new classicals. Its central question points to the real nature of new classical macroeconomics: what consequences are grounded by the assumptions new classicals used. Moreover, issues raised by automatic fiscal stabilizers and fiscal reforms are analyzed as well, even if they were out of the range of classical texts. The book draws a picture of new classical macroeconomics stressing the analogies with Keynesian countercyclical policies, instead of the discrepancies commonly held.
This book provides a new methodological approach to money and macroeconomics. Realizing that the abstract equilibrium models lacked descriptions of fundamental issues of a modern monetary economy, the focus of this book lies on the (stylized) balance sheets of the main actors. Money, after all, is born on the balance sheets of the central bank or commercial bank. While households and firms hold accounts at banks with deposits, banks hold an account at the central bank where deposits are called reserves. The book aims to explain how the two monetary circuits – central bank deposits and bank deposits – are intertwined. It is also shown how government spending injects money into the economy. Modern Monetary Theory and European Macroeconomics covers both the general case and then the Eurozone specifically. A very simple macroeconomic model follows which explains the major accounting identities of macroeconomics. Using this new methodology, the Eurozone crisis is examined from a fresh perspective. It turns out that not government debt but the stagnation of private sector debt was the major economic problem and that cuts in government spending worsened the economic situation. The concluding chapters discuss what a solution to the current problems of the Eurozone must look like, with scenarios that examine a future with and without a euro. This book provides a detailed balance sheet view of monetary and fiscal operations, with a focus on the Eurozone economy. Students, policy-makers and financial market actors will learn to assess the institutional processes that underpin a modern monetary economy, in times of boom and in times of bust.
