Matias Vernengo — Is there a new "new economics"?

Don’t get me wrong. I’m all for external critiques of mainstream economics. And I think there are important lessons from some of these fields. But they are all about imperfections. In my view, economics has to be rebuilt on old economics. The old economics of the classical authors and Marx, that understood that distribution reflects social conflict, in particular, class conflict, and the old “new economics” of Keynes, that understood that causality implied that demand determines supply (and not vice versa as in Say’s Law). Sure you might add complexity, and heterogeneous agents, and institutions (perhaps more than property rights?), and that helps too. But complexity, heterogeneous agents and other 'imperfections' are there, as I noted in my debate with Colander et al. as a way of making the mainstream more reasonable, and not to bring down a theory with insurmountable logical problems. My two cents.

Naked Keynesianism
Is there a new "new economics"?
Matias Vernengo | Associate Professor of Economics, Bucknell University