Theoretical Practice and the Foundational Level of Macroeconomic Analysis: Reflections on the Work of Fernando Cardim de Carvalho

This paper celebrates the contributions to Keynesian theory of the late Brazilian economist Fernando Cardim de Carvalho (1953–2018). We use Carvalho’s 12 refereed English-language papers on Keynesian theory — the first published in 1983, the last in 2016 — as a point of departure for reflecting on two questions confronting macroeconomists today. First, what is the work of the economist — in what does economic analysis consist? Second, in this post-crisis era, how might macroeconomics — and specifically Keynesian macroeconomics — be rebuilt? Carvalho’s writings show that the work of the economist can be as much about understanding the raw elements of human behavior in the real world — what we will call the foundational level of analysis — as about constructing models depicting the momentum of economic systems incorporating these behaviors. Adopting this approach to the practice of theory leads to insights and frameworks that would be lost if macroeconomic theorizing were equated with formal model building: it will enrich exchanges among economists, deepen the conceptual roots of Post Keynesian macroeconomics, and facilitate interdisciplinary exchange.