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Crises and paradigms in macroeconomics

Author

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  • Malcolm Sawyer

    (University of Leeds, UK)

Abstract

Contrasts are drawn between mainstream macroeconomics (with the 'New Consensus in Macroeconomics' taken as the current manifestation) and heterodox macroeconomics and their abilities to comprehend the financial crises and world wide recession of 2007 – 09 for macroeconomic paradigms is discussed. Specifically, the contrasting ways in which the two schools of thought treat unemployment, human behaviour, aggregate and money and credit are discussed. It is concluded that the events of 2007 – 09 once again cast doubt on the abilities of mainstream macroeconomics to confront the realities of capitalist economies.

Suggested Citation

  • Malcolm Sawyer, 2010. "Crises and paradigms in macroeconomics," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 7(2), pages 283-302.
    • Handle: RePEc:elg:ejeepi:v:7:y:2010:i:2:p283-302
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    References listed on IDEAS

    as
    1. Eckhard Hein & Torsten Niechoj & Engelbert Stockhammer (ed.), 2009. "Macroeconomic Policies on Shaky Foundations – Whither Mainstream Economics?," Conference proceedings of the Research Network Macroeconomics and Macroeconomic Policies (FMM), IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute, volume 12, number 12-2009, December.
    2. Eckhard Hein & Torsten Niechoj & Heinz-Peter Spahn & Achim Truger (ed.), 2008. "Finance-led Capitalism? Macroeconomic Effects of Changes in the Financial Sector," Conference proceedings of the Research Network Macroeconomics and Macroeconomic Policies (FMM), IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute, volume 11, number 11-2008, December.
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    More about this item

    Keywords

    macroeconomic paradigms; new consensus in macroeconomics; heterodox macroeconomics; economic crisis;
    All these keywords.

    JEL classification:

    • B50 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - General
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical

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