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Gattopardo economics: the crisis and the mainstream response of change that keeps things the same

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  • Thomas I. Palley

    (Associate of the New America Foundation's economic growth program)

Abstract

Gattopardo constitutes change that keeps things the same. Gattopardo is relevant for understanding the economics profession's response to the financial crash of 2008. This paper explores gattopardo economics as it applies to the issues of the macroeconomics of income distribution; the global financial imbalances; and inflation policy. Gattopardo economics adopts ideas developed by critics of mainstream economics, but it does so in a way that ignores the thrust of the original critique and leaves mainstream analysis unchanged. Gattopardo economics makes change more difficult because it deceives people into thinking change has taken place. By masquerading as change, it crowds-out space for real change. That makes exposing gattopardo economics a matter of vital importance.

Suggested Citation

  • Thomas I. Palley, 2013. "Gattopardo economics: the crisis and the mainstream response of change that keeps things the same," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 10(2), pages 193-206.
  • Handle: RePEc:elg:ejeepi:v:10:y:2013:i:2:p193-206
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    1. Thomas I. Palley, 2013. "Gattopardo economics: the crisis and the mainstream response of change that keeps things the same," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 10(2), pages 193-206.
    2. N. Gregory Mankiw, 2000. "The Savers-Spenders Theory of Fiscal Policy," American Economic Review, American Economic Association, vol. 90(2), pages 120-125, May.
    3. Palley, Thomas I., 2009. "America's exhausted paradigm: Macroeconomic causes of the financial crisis and great recession," IPE Working Papers 02/2009, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    4. Luigi L. Pasinetti, 1962. "Rate of Profit and Income Distribution in Relation to the Rate of Economic Growth," Review of Economic Studies, Oxford University Press, vol. 29(4), pages 267-279.
    5. Cynamon Barry Z. & Fazzari Steven M., 2008. "Household Debt in the Consumer Age: Source of Growth--Risk of Collapse," Capitalism and Society, De Gruyter, vol. 3(2), pages 1-32, October.
    6. Thomas Palley, 1997. "Endogenous money and the business cycle," Journal of Economics, Springer, vol. 65(2), pages 133-149, June.
    7. Kalina Manova & Zhiwei Zhang, 2008. "China's exporters and importers: firms, products, and trade partners," Working Paper Series 2008-28, Federal Reserve Bank of San Francisco.
    8. Thomas Palley, 2010. "The Relative Permanent Income Theory of Consumption: A Synthetic Keynes-Duesenberry-Friedman Model," Review of Political Economy, Taylor & Francis Journals, vol. 22(1), pages 41-56.
    9. Harris, Donald J, 1974. "The Price Policy of Firms, the Level of Employment and Distribution of Income in the Short Run," Australian Economic Papers, Wiley Blackwell, vol. 13(22), pages 144-151, June.
    10. Till van Treeck, 2012. "Did inequality cause the U.S. financial crisis?," IMK Working Paper 91-2012, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
    11. Thomas Palley, 2005. "The Questionable Legacy of Alan Greenspan," Challenge, Taylor & Francis Journals, vol. 48(6), pages 17-31.
    12. Thomas I. Palley, 1993. "Under-Consumption and the Accumulation Motive," Review of Radical Political Economics, Union for Radical Political Economics, vol. 25(1), pages 71-86, March.
    13. Thomas I. Palley, 2002. "Economic contradictions coming home to roost? Does the U.S. economy face a long-term aggregate demand generation problem?," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 25(1), pages 9-32.
    14. Raghuram G. Rajan, 2010. "Fault Lines: How Hidden Fractures Still Threaten the World Economy," Economics Books, Princeton University Press, edition 1, number 9111.
    15. Thomas I. Palley, 2011. "Explaining Global Financial Imbalances: A Critique of the Saving Glut and Reserve Currency Hypotheses," IMK Working Paper 13-2011, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
    16. Aldo Barba & Massimo Pivetti, 2009. "Rising household debt: Its causes and macroeconomic implications--a long-period analysis," Cambridge Journal of Economics, Oxford University Press, vol. 33(1), pages 113-137, January.
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    Citations

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    Cited by:

    1. Jo Michell, 2014. "Factors generating and transmitting the financial crisis; Functional distribution of income," Working papers wpaper41, Financialisation, Economy, Society & Sustainable Development (FESSUD) Project.
    2. repec:mes:ijpoec:v:43:y:2014:i:3:p:70-93 is not listed on IDEAS
    3. Arne Heise, 2014. "The Future of Economics in a Lakatos–Bourdieu Framework," International Journal of Political Economy, Taylor & Francis Journals, vol. 43(3), pages 70-93, July.
    4. Wolfram Elsner, 2013. "State and future of the ‘citadel’ and of the heterodoxies in economics: challenges and dangers, convergences and cooperation," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 10(3), pages 286—298-2, December.
    5. Thomas I. Palley, 2015. "Inequality, the Financial Crisis and Stagnation: Competing Stories and Why They Matter," IMK Working Paper 151-2015, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
    6. Modenesi, Rui Lyrio & Modenesi, André de Melo & Martins, Norberto Montani & Fontaine, Patrick, 2015. "Restructuring the Economic Policy Framework in Brazil: Genuine or Gattopardo change?," Revue de la Régulation - Capitalisme, institutions, pouvoirs, Association Recherche et Régulation, vol. 17.
    7. Lavoie, Marc, 2015. "¿Debería la economía heterodoxa ser enseñada en departamentos de economía, o existe algún espacio para la economía backwater?," Estudios Nueva Economía, Estudios Nueva Economía, vol. 4(1), pages 4-16.
    8. Marchionatti, Roberto & Sella, Lisa, 2015. "Is Neo-Walrasian Macroeconomics a Dead End?," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201521, University of Turin.
    9. Thomas I. Palley, 2013. "Gattopardo economics: the crisis and the mainstream response of change that keeps things the same," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 10(2), pages 193-206.

    More about this item

    Keywords

    gattopardo economics; income distribution; global financial imbalances; inflation policy;

    JEL classification:

    • A11 - General Economics and Teaching - - General Economics - - - Role of Economics; Role of Economists
    • A14 - General Economics and Teaching - - General Economics - - - Sociology of Economics
    • E00 - Macroeconomics and Monetary Economics - - General - - - General

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