Economics with a bang and a whimper

Flattr this!

This is the sec­ond arti­cle in a three-part series on the self-destruc­tion of neo­clas­si­cal eco­nom­ic the­o­ry. See part one here.

As the neo­clas­si­cal eco­nom­ics tra­di­tion grad­u­al­ly gave up its cen­tral posi­tion in uni­ver­si­ties over the last forty years, it remained tri­umphant in the real world. But the glob­al finan­cial cri­sis brought a sud­den, shock­ing end to this exhuberism.

The fail­ure of neo­clas­si­cal mod­els to antic­i­pate it (and the suc­cess of many non-ortho­dox the­o­rists to do so – includ­ing me, but also Wynne God­ley and his col­lab­o­ra­tors using a sec­toral bal­ances approach, Ann Pet­ti­for, Michael Hud­son, Nouriel Roubi­ni, Dean Bak­er, and numer­ous Aus­tri­an-informed com­men­ta­tors) sud­den­ly called into ques­tion the role of the tra­di­tion.

Read more:

Bookmark the permalink.

About Steve Keen

I am Professor of Economics and Head of Economics, History and Politics at Kingston University London, and a long time critic of conventional economic thought. As well as attacking mainstream thought in Debunking Economics, I am also developing an alternative dynamic approach to economic modelling. The key issue I am tackling here is the prospect for a debt-deflation on the back of the enormous private debts accumulated globally, and our very low rate of inflation.