Simon Wren-Lewis — The Return of Schools of Thought Macro

Read it at mainly macro
The Return of Schools of Thought Macro

by Simon Wren-Lewis

I left the following comment there:

Jamie Galbraith wrote a paper some time ago in response to Krugman's admission that some heterodox economists got the developing crisis right (prediction and explanation) while the mainstream economists missed it, cannot explain it, and have not produced policy that will fix the damage. A number or heterodox economists predicted it, explained it, and offered policy prescriptions based on the macro theory. 

The title of Galbraith paper was "Who Are These Economists, Anyway?" He mentions five: 1. Marxians as habitual Cassandras, 2. Dean Baker (Post Keynesian), 3. Wynne Godley (Post Keynesian), 4. Minskyians (who are also Post Keynesians), and 5. Galbraithians-Instititutionalists (JKG cites William K. Black of UMKC, Post Keynesian-MMT). He could also have mentioned Steve Keen as a Post Keynesian that emphases Minsky, as well as L. Randall Wray and Warren Mosler of Modern Monetary Theory (MMT), which is an outgrowth of Post Keynesianism, especially Lerner, Minksy, and Godley. 

Other than the Marxists, these economists are quite close to each other on most matters and significantly in agree over their areas of disagreement with New Classicalism and New Keynesianism. There is quite a large body of literature on this that goes back decades and has exploded recently.