Monday, August 29, 2016

Simon Wren-Lewis — Heterodox economics, mainstream macro and the financial crisis

Hyman Minsky, Wynne Godley, SFC modeling, and by implication MMT.

"We already knew that."

Mainly Macro
Heterodox economics, mainstream macro and the financial crisis
Simon Wren-Lewis | Professor of Economics, Oxford University
ht Random in the comments


Matt Franko said...

"But this is accounting, not economics,"

He may have a point here...

Tom Hickey said...

The language of science is mathematics. The language of commerce is accounting. Certainly a science whose subject matter is commerce must employ both where appropriate. The argument is about the "where."

Tom Hickey said...

SWL calls himself a Keynesian and doesn’t get how liquidity preference affects the ratio between spending and saving propensities and how this ratio impacts macro, as well as how MInsky's analysis feeds into this.

The sectoral balances show together with functional finance show how to maintain the sectoral balances at actual full employment, given an MMT JG as buffer stock of employed and price anchor.

SWL should read Bill's recent series, "Modern Monetary Theory – what is new about it? " at billy blog and respond to it.

Peter Pan said...

As the scope and diversity of mainstream theory gets larger and wider, the space that can be occupied by those who reject the mainstream shrinks.

A variation of the True Scotsman argument. In the end, we're all Scotsmen.