ArticlePDF Available

Abstract

Post Keynesians should not be afraid to teach what they believe represents the best explanation of macroeconomic fluctuations. Our colleagues in the mainstream certainly are not and, realistically speaking, it is hard to imagine that any student would be handicapped by not having had a full dose of IS-LM, the accelerationist hypothesis, Phillips Curves, and so on. Furthermore, there may not be a more opportune time to introduce post Keynesianism to undergraduate students with Neoclassicals still recovering from their inability to explain the financial crisis. This article argues for a post Keynesian-focused intermediate macroeconomics and offers a sample plan. It reviews the state of post-financial crisis mainstream macro teaching and references pedagogical literature in showing how a post Keynesian transformation and reorganization can be made most effective.
A preview of the PDF is not available
... In contradistinction, students are interested in applying their academic knowledge to what happens to real world economic phenomena, beyond the limitations that both traditional and modern macroeconomic models place. This interest has become even stronger after the recent global financial crisis that revealed serious shortcomings in how the economy really works and is taught (Harvey, 2018). The current crisis is considered as the worst crisis that capitalism has faced since the Great Depression; nevertheless, it has not yet generated any significant change in the teaching and practice of macroeconomics (Azad, 2016). ...
... In contradistinction, students are interested in applying their academic knowledge to what happens to real world economic phenomena, beyond the limitations that both traditional and modern macroeconomic models place. This interest has become even stronger after the recent global financial crisis that revealed serious shortcomings in how the economy really works and is taught (Harvey, 2018). The current crisis is considered as the worst crisis that capitalism has faced since the Great Depression; nevertheless, it has not yet generated any significant change in the teaching and practice of macroeconomics (Azad, 2016). ...
... I argue elsewhere that Post Keynesian instructors should not hesitate to teach intermediate macroeconomics as a Post Keynesian course (Harvey, 2018). Our Neoclassical colleagues are certainly not worried about equal treatment and that class may be our last opportunity to reach students. ...
Preprint
This paper builds a dynamic (and NOT general equilibrium!) Keynes/Kalecki/Minsky-style macro simulation in Excel for use in Intermediate Macroeconomics. It is set in time, it is capable of creating a business cycle, it demonstrates the effect of fundamental uncertainty in creating volatile forecast adjustments, it includes debt and the possibility of financial crisis, and it can be used to compare the effects of automatic stabilizers versus a job guarantee. The simulation is simplistic, but I believe it is a very effective means of communicating to students an essential element of our method that may otherwise be difficult to convey.
Article
Full-text available
Paul Davidson's intermediate macroeconomics textbook, Post Keynesian Macroeconomic Theory: A Foundation for Successful Economic Policies for the Twenty-First Century, serves as an excellent introduction to the economics of Keynes. It opens with a rejection of Say's law, then works its way through the determinants and effects of consumption, investment, government spending, and trade. In addition, a great deal of time is spent discussing financial markets (domestic and international) and the balance that must be found between the need to provide liquidity and the instability created by "a large number of ignorant individuals." What is not as clear, however, is the nature of what Keynes discussed in chapter 22 of the General Theory: the trade cycle. That said, the ideal tool for addressing this already exists in the book. This article shows that by not ignoring the demand curve in Davidson's capital market model, a much more interesting story can be told. When entrepreneurs' expectations about the growth in demand for the products produced by capital are considered, the logical result is that, as gross investment falls over the expansion, so those expectations are bound to be disappointed. This sets the stage for possibly catastrophic collapses and offers a far more dynamic and Keynes-like story.
Article
Full-text available
A university education should enable and improve students' cognitive abilities. An effective curriculum can help achieve this objective. Teaching that economics is more than just neoclassicism, for example, could aid the transition to higher stages of cognition. That said, even erstwhile supporters are sometimes reluctant to take this step for fear that students may become confused. Also open to question is how much students really develop an ability to select among various paradigms, or if they simply exit a course with their professor's biases. To answer these questions, a survey was conducted among students enrolled in several sections of a Contending Perspectives in Economics course. The data suggest that, far from being disillusioned, they exit the course with great enthusiasm and increased confidence, although somewhat influenced by the instructor's school of thought.
Book
In this updated and revised edition of Post Keynesian Macroeconomic Theory, Paul Davidson explains how and why contemporary macroeconomic textbooks fail to incorporate Keynes's liquidity and financial analysis framework to explain the importance of money and financial markets in the real world of experience. This important text develops Keynes's analytical framework for both closed and open economies and provides policy guidance for the global economy of the 21st century. In particular, it deals with problems such as inflation, financial contagion, global unemployment, outsourcing, trade patterns, and developing an international financial system which encourages expansionary growth among all trading partners while avoiding sovereign debt problems. Using this textbook in macroeconomics courses will provide students with a study of macroeconomics that will be useful and productive.
Article
The present article offers a fundamental critique of fiscal policy as it is understood in theory and exercised in practice. Two specific demand-side stabilization methods are examined here: conventional pump priming and the new designation of fiscal policy effectiveness found in the new consensus literature. A theoretical critique of their respective transmission mechanisms reveals that they operate in a trickle-down fashion that not only fails to secure and maintain full employment, but itself contributes to the increasing postwar labor market precariousness and the erosion of income equality. The two conventional demand-side measures are then contrasted with the proposed alternative-a bottom-up approach to fiscal policy based on a reinterpretation of Keynes's original policy prescriptions for full employment. The article offers theoretical, methodological, and policy rationale for government intervention that includes specific direct employment and investment initiatives, which are inherently different from contemporary hydraulic fine-tuning measures. It outlines the contours of the modern bottom-up approach and concludes with some of its advantages over conventional stabilization methods.
Article
A difficulty in teaching undergraduate courses from a non-orthodox perspective is the lack of written material to draw upon. This reading, written for an introductory macroeconomics course, is an attempt to fill a small part of that void by providing a discussion of money creation from an endogenous money perspective. By focusing on the ability of banks to engage in asset and liability management, the reading makes it easy for students to comprehend why investment is never constrained by a lack of saving. For those who are compelled to also present the orthodox perspective, the question is which view to discuss first. Based on readings in cognitive science, unveiling the non-orthodox material first will greatly increase the chances students will analyze social problems from a non-orthodox perspective. Consequently, this reading is designed to be the student's first encounter with the subject of money and money creation. Orthodox textbooks usually omit from their balance sheets the two items that allow banks to make loans without excess reserves. By presenting the non-orthodox view first, students easily see the problems with the orthodox money multiplier approach.
Article
A lack of consensus remains on what should form the theoretical core of the undergraduate intermediate macroeconomic course. In determining how to deal with the Keynesian/classical divide, instructors must decide whether to follow the modern approach of building macroeconomic relationships from micro foundations, or to use the traditional approach based on aggregate models of the macroeconomy. In this article, the authors discuss the advantages and shortcomings of each approach in the context of course objectives. Because there is significant heterogeneity in textbook coverage, the authors summarize some of the approaches taken in current intermediate-level textbooks, which should serve as a useful starting point for new instructors. The authors also discuss how each approach can be extended to analyze the recent recession in the United States.