Macroeconomics: a Critical Introduction
247 West 37th St, 5th Floor
New York, NY 10018
Writing in 2004, Ben Bernanke argued that the economy had entered a period of “Great Moderation” characterized by “significant improvements in economic growth and productivity but also a marked reduction in economic volatility, both in the United States and abroad.” In this, he was drawing on the resources of common macroeconomics–economic approaches to understanding “the economy” as a whole. Like many other “neoclassical” economists, Bernanke argued that the economy had changed and severe recessions were a thing of the past (a change attributable to sound monetary policy–manipulation of the interest rate by the Central Bank). Four years later, the 2008 financial crisis proved them wrong. How, and why, did mainstream macroeconomics fail to understand the nature of the credit bubble that led to crisis? And what does this example teach us about the nature and limitations of macroeconomics as an approach to understanding the economy at large?
Using these questions as a starting point, this course offers a critical introduction to macroeconomics. We’ll start with the standard textbook concepts (the so-called neoclassical synthesis of Keynes’ General Theory) including various models, concepts such as the Phillips curve, and the Solow’s growth theory to address fundamental questions such as: What causes economic output to grow and fluctuate in business cycles? What causes inflation and unemployment? How are interest rates determined? What are the mechanisms of monetary and fiscal policy? Next, the course will outline the basic tenets of mainstream macroeconomic theory regarding profits, wages, employment patterns, growth and technological change, and crisis. Drawing from Steve Keen’s Debunking Economics, Lance Taylor’s Maynard’s Revenge: The Collapse of Free Market Macroeconomics, Anwar Shaikh’s Capitalism: Competition, Conflict, Crises, and others, we’ll assess the realism of different economic models. What does the empirical evidence tell us? What are the alternatives?
Course ScheduleWednesday, 6:30-9:30pm
November 14 — December 12, 2018
4 sessions over 5 weeks