Posted by: Dirk | July 9, 2014

Lavoie: Essentials of heterodox and post-Keynesian economics

Canadian economist Marc Lavoie has published a 2nd edition of his ‘Foundations’: New Foundations of Post-Keynesian Economics. The chapter on essentials of heterodox and post-Keynesian economics is available as a pdf online (for free). His 70 pages on the subject are more dense (70 pages) but also less fun to read than Steve Keen’s Debunking Economics. For those interested in the wider picture, I recommend A short history of economic thought by Bo Sandelin, Hans-Michael Trautwein and Richard Wundrak (112 pages). After having read all three books (except the last chapter on inflation in Lavoie), I think that these three or any close substitutes should become required reading for all students of economics. The menu of problems is much wider than what is offered in textbooks (mainly: inflation-bad, public debt-bad, etc.), as is the methodological variety. While the books deal mainly with macroeconomic problems, there are some connections to micro. Micro and macro are two scales which should take into account each other, so I would recommend these three books also to the empirical microeconomist. The economy is a system, and partial equilibrium thinking should be understood as a very, very large simplification which has to be taken with caution. If we were all in equilibrium, the world would not be so exciting.


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