01 Marc Lavoie History and fundamentals of Post Keynesian Macroeconomics

2019 marks the 20th anniversary of the introduction of the Euro, replacing 11 national currencies. The two decades have been characterised by geographical extension to nowadays 19 countries, a modest increase in the Euro’s international role, but also by the build-up of unsustainable imbalances, and a long and deep economic and political crisis specific to many countries sharing the common currency. In response, substantial reforms have been undertaken without, though, resolving a number of key economic governance weaknesses. Since even before its birth the euro has been a subject of controversial debate amongst economists of all schools. That debate has only intensified since the crisis. Now emerging into “adulthood”, serious questions remain. Is the common currency sustainable in something like its present form? What economic policies are feasible within the current framework? What crucial reforms need to be pushed through? Can a path back to national currencies be trodden while avoiding a major crisis?
There will be a day of introductory lectures for graduate students on 24th October prior to the opening panel, featuring the following topics in heterodox economics:
Marc Lavoie (University of Paris 13, France): History and fundamentals of Post-Keynesian Macroeconomics.
Steven Fazzari (Washington University in St. Louis, USA): Income distribution and aggregate demand.
Daniela Gabor (University of the West of England, GB): Shadow banking and financial market regulation.

[@teddyj.3198]

Helpful info. Thanks

[@Hexx8]

you're on tiktok right?

[@Rodrigo-dc6wi]

Go back to tik tok challenge?

[@gretafear210]

yo teddy

[@Herbwise]

A nice overview. To learn more about the “commons” would it be useful to read Polanyi and McMurtry? And the issues related to climate crises was overlooked completely unless that is considered a constraint. But money was essentially put on the back burner until MMT was mentioned. And no real distinction was made between linear and non-linear mathematical approaches. It would have been interesting to see the ideas of complexity theory fit into this description especially with respect to future activities. L Randall WRay has stated that Japan did not follow MMT ideas.

[@Azazin187]

The idea of "inconsistent heterodox" economists at 24:29 is very important for the future of heterodox economics. The reliance on economic models and econometrics (since the last 10+ years) is a step in the wrong direction. Post-Keynesians should try to expand their microeconomic theory (without ignoring Marx) as well as theories on international trade.

[@fachriranu1041]

I dont think inclusion of economic model and econometrics is wrong unless we become to reliant and oversimplified real world for the sake of elegant mathematical model.

[@Azazin187]

​@@fachriranu1041 If you agree that economics is a social science (instead of a natural science) then you need to justify the use of economic models. Since PK economics is rooted in Critical Realism (as a social ontology) and Tony Lawson as a leading thinker argued that economic models are useless (because models are always a simplification of the real world, therefore are always unrealistic). Which means, that there is no scientific justification to use them in (heterodox) economics. The arguments against econometrics are a bit different. There is a joke going around: "If you torture the numbers long enough, they will surrender." With econometrics, you can proof or disproof basically anything. At least that's the criticism that was mentioned often by heterodox professors.

[@fachriranu1041]

@@Azazin187 how about stock flow consistent modeling? Or system dynamic that also stock flow consistent like Minsky software (Steve Keen)? Unwarranted too?

[@Azazin187]

@@fachriranu1041 I'm quite fond of balances mechanics and sectoral balances and used them often in macro, but SFC models are problematic. These models are more irrelevant (or did we learn anything groundbreaking new from using them?) and if you try to make the model more realistic, you need (automatically) way more equations. Lavoie himself addressed a number of limitations to SFC modelling which are still relevant. With the Minsky software I'm less familiar, but I like the idea that you could use computer simulations based on micro and macro data to show specific effects, Paul Cockshott did that from a critical political economy pov. But, a simulation is only as good as the person who programmed it, so I would be very careful taking these simulations for granted. The criticism towards simulations are the same as for models, they are unrealistic. For example, if some aspects of PK economics are wrong, they will be wrong in the Minsky software too.

[@saturngenesis1306]

​@@Azazin187 Any notable authors you'd recommend on trade?

[@9400jfm]

42:00

[@abcrane]

The “glitch” that I see in economics as a study is its attempt to be philosophy. This is where economics fails - when it veers off into the “syllogism.” Economics in the normative “what ought to be” gets buried in the positive “what actually is.” Laypersons then confuse the two and the dialectic gets lost in the thickets of “economic rhetoric .” If economists are honest they will state clearly what ought to be in their opinion and then how what ought to be can actually be. Instead they get tangled up in the jargon and nuts and bolts divorced of the bigger picture. Smith and Marx were sincere in this regard but later “philosophers” lost sight of this forest through the shrubs. A true heterodoxy will embrace this original orthodoxy and build on it”s integrated understanding.