Macroeconomics: a Critical Introduction
Macroeconomic policy—from “quantitative easing” to fiscal austerity to basic understandings of growth, interest, inflation, and productivity—impacts everyday lives. It affects one’s job, wage and even political rights and obligations. Understanding macroeconomic concepts, data, theories, and policies help us make sense of the ways in which the economy works in the real world. At the same time, macroeconomic ideas are historically produced, influenced by theories that rise and fade in popularity, and mediated by national and international power relations. However univocal policy makers may seem, there is in fact wide disagreement on monetary and fiscal policy. Moreover, no economy is self-contained—to understand the function of international commerce, the balance of payments, and the importance of the US dollar, we have to situate macroeconomics within the context of an international division of labor. What are the elements of macroeconomics? And, how can an understanding of the theories and concepts of mainstream macroeconomics—as well as their limitations and critiques—help us make sense of “the economy” today?
In this course, we will explore the historical origins, essential components, mainstream theories, and heterodox critiques of macroeconomics. We’ll begin with an investigation into neoclassical theories of money and employment, the causes of the Great Depression, and the resulting need for macroeconomic policies. From there, we’ll explore Keynesian theories of money, employment, and effective demand, as well as the roles of monetary and fiscal policies. Next, we’ll take a structural approach and focus on the relationships between GDP, international trade, and balance of payments. Finally, we will address contemporary concerns around GDP growth (consumption-led growth, export-led growth), GDP stagnation, hyperinflation, and dollarization, using the experiences of various countries as examples. As we go, we’ll return constantly to the question: What are the contributions and limits of mainstream and Keynesian approaches to macroeconomics?
Readings will be drawn from Ha-Joon Chang’s Economics: a User’s Guide, Alfred Marshall’s The Principles of Economics, and John Manyard Keynes’s The General Theory of Employment, Money, and Interest, among other sources.
Course ScheduleTuesday, 6:30-9:30pm EST
October 20 — November 10, 2020