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Should the History of Macroeconomics Steer Cear of the Fray or be Partisan? A Critical Essay on Banks and Finance in Modern Macroeconomics by B. Ingrao and C. Sardoni

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  • Michel De Vroey

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))

Abstract

My review of Ingrao and Sardoni’s book paper focuses on its Part II, entitled “From the Neoclassical Synthesis to New Keynesian Economics.” My criticisms amount to three. First, I disagree with Ingrao and Sardoni’s account of the twists and turns that have occurred in modern macroeconomics. Often, where they see continuity, I see cleavage; where they see cleavage, I see continuity. Second, I put forward that the result of the 2008 recession is that DSGE economists were led to zero in on the hitherto neglected issue of the workings of the financial sector and its integration in their models. Hence, Ingrao and Sardoni’s conclusion of failure must be revised. Third, I want to bring out that the internal history of economics can be written in two ways: the approach can be partisan or steer clear of the fray. As I am in favor of the latter, I regret that Ingrao and Sardoni have adopted the former.

Suggested Citation

  • Michel De Vroey, 2020. "Should the History of Macroeconomics Steer Cear of the Fray or be Partisan? A Critical Essay on Banks and Finance in Modern Macroeconomics by B. Ingrao and C. Sardoni," LIDAM Discussion Papers IRES 2020028, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    • Handle: RePEc:ctl:louvir:2020028
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    File URL: https://sites.uclouvain.be/econ/DP/IRES/2020028.pdf
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    References listed on IDEAS

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    1. Bruna Ingrao & Claudio Sardoni, 2019. "Banks and Finance in Modern Macroeconomics," Books, Edward Elgar Publishing, number 17355.
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    6. De Vroey,Michel, 2016. "A History of Macroeconomics from Keynes to Lucas and Beyond," Cambridge Books, Cambridge University Press, number 9781107584945.
    7. Frédéric Boissay & Fabrice Collard & Frank Smets, 2016. "Booms and Banking Crises," Journal of Political Economy, University of Chicago Press, vol. 124(2), pages 489-538.
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    More about this item

    Keywords

    History of macroeconomics; banking finance;

    JEL classification:

    • B10 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - General
    • B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics
    • B26 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Financial Economics

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