The competing approaches: theory and policy

In this Chapter we present the competing interpretations of a number of issues that the two alternative models tackle in different ways. Preliminary to this, the method of the analysis underlying this Chapter and the book as a whole is described: it is a comparative method which shows that simple modifications of the relations between the endogenous and exogenous variables and of their functional form can bring an economic model to completely different conclusions. This is the case for the further insights presented in the Chapter. Among them: two competing interpretation of the economic crisis; alternative monetary policy rules; different interpretations of the sustainability of public debt and of the so called hystheresis of unemployment; wage competition between countries; the relation between labour flexibility and the level of unemployment; economic growth; the effects of the covid-19 pandemic; Tobin tax and international capital mobility; the stock market.