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Toward a New Instrumental Macroeconomics: Abba Lerner and Adolph Lowe on Economic Method, Theory, History, and Policy

Listed author(s):
  • Mathew Forstater

    (The Jerome Levy Economics Institute)

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    This paper argues that the ideas of Abba Lerner and Adolph Lowe contain overlapping and complementary insights and themes that may contribute to the development of a new approach to macroeconomics, and that have rather specific practical policy implications. Lerner's notions of functional finance and money as a creature of the state are combined with Lowe's structural analysis to forge an approach to macroeconomic theory and policy that considers both aggregate proportionality and balance and sectoral relations, and that addresses issues regarding monetary production and effective demand, as well as ongoing structural and technological change. Such a "New Instrumental Macroeconomics," focusing on full employment, price stability, and a decent standard of living for all, has important points of contact with recent proposals promoting job opportunities through direct job creation, with a Public Service Corps that benefits communities while serving as a buffer stock of labor providing price stability.

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    Paper provided by EconWPA in its series Macroeconomics with number 9811003.

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    Length: 20 pages
    Date of creation: 17 Nov 1998
    Handle: RePEc:wpa:wuwpma:9811003
    Note: Type of Document - Acrobat PDF; prepared on IBM PC; to print on PostScript; pages: 20; figures: included
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