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New Consensus Macroeconomics: A Critical Appraisal

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  • Philip Arestis

Abstract

This paper is concerned with the New Consensus Macroeconomics (NCM) in the case of an open economy. It outlines and explains briefly the main elements of and way of thinking about the macroeconomy from the standpoint of both its theoretical and its policy dimensions. There are a few problems with this particular theoretical framework. We focus here on two important aspects closely related to NCM: the absence of banks and monetary aggregates from this theoretical framework, and the way the notion of the “equilibrium real rate of interest” is utilized by the same framework. The analysis is critical of NCM from a Keynesian perspective.

Suggested Citation

  • Philip Arestis, 2009. "New Consensus Macroeconomics: A Critical Appraisal," Economics Working Paper Archive wp_564, Levy Economics Institute.
  • Handle: RePEc:lev:wrkpap:wp_564
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    File URL: http://www.levyinstitute.org/pubs/wp_564.pdf
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Will the U.S. recover lost output and jobs?
      by Gennaro Zezza in Multiplier Effect on 2011-01-12 18:00:00

    Citations

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    Cited by:

    1. Faruk Ülgen, 2014. "Financialized capitalism and the irrelevance of self-regulation : a Minskyian analysis of systemic viability," Post-Print halshs-01111162, HAL.
    2. Horacio A. Aguirre, 2011. "On the “Science” of Monetary Policy: Methodological Notes," Ensayos Económicos, Central Bank of Argentina, Economic Research Department, vol. 1(64), pages 83-115, October -.
    3. Emiliano Brancaccio & Giuseppe Fontana, 2013. "'Solvency rule' versus 'Taylor rule': an alternative interpretation of the relation between monetary policy and the economic crisis," Cambridge Journal of Economics, Oxford University Press, vol. 37(1), pages 17-33.
    4. Lengnick, Matthias, 2013. "Agent-based macroeconomics: A baseline model," Journal of Economic Behavior & Organization, Elsevier, vol. 86(C), pages 102-120.
    5. Lancastle, Neil, 2012. "Circuit theory extended: The role of speculation in crises," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy (IfW), vol. 6, pages 1-27.
    6. Faruk Ülgen, 2015. "From liberal finance inconsistency to relevant systemic regulation : an institutionalist analysis," Post-Print halshs-01166696, HAL.
    7. Philip Arestis & Malcolm Sawyer, 2010. "What Monetary Policy after the Crisis?," Review of Political Economy, Taylor & Francis Journals, vol. 22(4), pages 499-515.
    8. Lekha Chakraborty & Kushagra Om Varma, 2015. "Efficacy of New Monetary Framework and Determining Inflation in India: An Empirical Analysis of Financially Deregulated Regime," Working Papers id:7336, eSocialSciences.
    9. Alessandro Roncaglia, 2015. "Oil and its markets," PSL Quarterly Review, Economia civile, vol. 68(273), pages 151-175.
    10. José Francisco Bellod Redondo, 2013. "La NAIRU y la pseudociencia neoliberal," Revista de Economía Crítica, Asociación de Economía Crítica, vol. 16, pages 18-43.
    11. Julio Lopez Gallardo, Roberto Valencia Arriaga, 2015. "Macroeconomic effects of high interest rate policy: Mexico’s experience," PSL Quarterly Review, Economia civile, vol. 68(274), pages 214-237.
    12. repec:bla:ausecp:v:56:y:2017:i:2:p:119-133 is not listed on IDEAS
    13. Philip Arestis, 2013. "Inflation Targeting: A Critical Approach," Ensayos Económicos, Central Bank of Argentina, Economic Research Department, vol. 1(68), pages 7-21, June.
    14. repec:asi:ijosaa:2017:p:31-44 is not listed on IDEAS
    15. Chakraborty, Lekha S, 2014. "Macroeconomics of “NaMo” Budget 2014 in India," MPRA Paper 67045, University Library of Munich, Germany, revised 2014.

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