IDEAS home Printed from
   My bibliography  Save this paper

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


  • Mathew Forstater

    (The Jerome Levy Economics Institute)


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.

Suggested Citation

  • Mathew Forstater, 1998. "Toward a New Instrumental Macroeconomics: Abba Lerner and Adolph Lowe on Economic Method, Theory, History, and Policy," Macroeconomics 9811003, EconWPA.
  • Handle: RePEc:wpa:wuwpma:9811003
    Note: Type of Document - Acrobat PDF; prepared on IBM PC; to print on PostScript; pages: 20; figures: included

    Download full text from publisher

    File URL:
    Download Restriction: no

    More about this item

    JEL classification:

    • E - Macroeconomics and Monetary Economics

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wpa:wuwpma:9811003. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (EconWPA). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.