A little bit of bliss in this ten minute talk by Prof. David Harvey, and his take on what’s happened in the crisis, what the various explanations are, and what we should do. Beautifully rendered by the people from RSAnimate.
Hope you enjoy it as much as I did :)
Paul Gregory, economist and author of economics textbooks, is wondering whether economics should and will change in response to the crisis. When he wrote his first textbook (with Roy Ruffin) some 30 years ago, they were writing in the midst of stagflation and what could be called the emergence of rational expectations etc etc. Gregory who was once pushing textbooks in new directions in response to the stagflation crisis, concludes that the recent crisis (which he recognises as the worst in 40+ years), should not lead to a re-evaluation of economics:
There is no need for a new Economics 101. What we have experienced over the past two years is nothing new. There is nothing unexpected that has happened. Events however should serve as “teachable moments. What is surprising is that Keynesian economists do not seem to have learned its lessons.
I’m not sure where the quotation mark ends, but clearly Gregory doesn’t think economics needs an update. But then again, his textbook was last re-published in 2000, and I guess it’s a lot of work re-thinking what you’ve thought for three decades…
Richard Posner, One of the most influential legal minds in the USA and a lecturer at Chicago yesterday became a Keynesian… And here I am not talking new-keynesian, post-keynesian, bastard-keynesian or neo-keynesian… I mean, he picked up The General Theory, read it, and he likes it. He even agrees with it, when only recently:
I would not have been surprised by, or inclined to challenge, the claim made in 1992 by Gregory Mankiw, a prominent macroeconomist at Harvard, that “after fifty years of additional progress in economic science, The General Theory is an outdated book. We are in a much better position than Keynes was to figure out how the economy works.” We have learned since September that the present generation of economists has not figured out how the economy works.
So then… People are actually reading Keynes’s economics again. I guess it can’t hurt to start reading the old masters.
Skidelsky, he of the John Maynard Keynes Biography, met with The Economist this week to have a chat about Mr. Keynes himself… This might just coincide with Skidelsky’s forthcoming book on Keynes’s return… I have just downloaded the podcast myself, but thought I would share it to hear what people think:
This is all part of the economists pod-cast series, which isn’t bad at all, if you ignore the name of the thing…
As a kid, I rode my bike all around Brooklyn, on the streets, through the parks, against traffic–sans helmet. Coming home one day, down my own block, I stuck my foot into the front wheel spokes. The wheel came to a complete stop and I flipped over my bike. Ended up pretty bruised, but no broken bones.
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My only friend at work sent me this:
Taking the Name of Lord Keynes in Vain
We both laughed at the article. I call Tennessee (not his real name, but it’ll do) my only friend cause he’s the only person at the office I’ll drink with regularly (and not out of work obligation). Tennessee is a libertarian economist and there aren’t any logical reasons why we’re friends. I mean seriously:
You get the picture. Oddly enough, we both hate EVERYTHING Freakanomics related. With a passion (another post–someday). And neither of us can believe the entire Econonerd world thinks they are now a Keynesian.
We’re both pretty staunch in our beliefs (him: free trade & no government; me: regulation & all government). But what neither of us gets is: how does one stop believing in everything they embraced in grad school? How do all the business executives, financial analysts/economists just stop in their tracks and do a complete 360 without falling off their bike? Why was it so easy for them to dump their neoclassical training and beliefs, and become a Keynesian (possibly again, if they jumped off and on the boat in the 70s and 80s, respectively as well)?
And it leaves me a little bit more confused and out of place. Where does that leave me and my fellow heterodox economists? Why hasn’t anyone in the mainstream community say “Hey maybe those crazy Post-Keynesians who stuck by their guns all these years are right?” Where do us Post-Keynesians fit in?
PS: Oh, Tennessee and I both like bourbon and beer. Maybe that’s why we’re friends.
