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  MPIfG Scholar in Residence Lectures

 

MPIfG Scholar in Residence Lectures 2015 by Robert Boyer


 


 
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Economic Theory Facing Major Changes and Systemic Crises: An Analytical and Social History of Macroeconomics


 
With financial globalization, crises have become more and more frequent, ranging from Latin America in the mid-1980s to Asia in 1997. The majority of economists interpreted these dramatic episodes as exotic by assuming that financial and economic crises were the direct outcome of bad public policies, the irrationality of economic actors, or populism. During the early 2000s, the Great Moderation that was associated with low inflation and rapid growth was attributed to enlightened central bankers and finance ministers who had adopted new classical macroeconomics as a guiding principle. With the quasi-collapse of the American financial system in September 2008 and the subsequent euro crisis in the 2010s, an erosion of this belief took place. However, some theoreticians and policy makers continue to attribute the current situation to an unfortunate but exceptional event with no implication for economic theory.

 
The three lectures seriously challenge this too easy avoidance of a rigorous assessment of the achievements of an economic theory that on the one hand represents extreme virtuosity but on the other dramatic failure. The first lecture intends to show that the eurozone crisis is not only the outcome of an institutional architecture that is dysfunctional and incomplete, but also the consequence of an irrelevant economic theory that postulates the self-equilibrating property of markets. The second lecture addresses a core issue: why was the economic profession unable to detect such a major crisis as the one generated by the bankruptcy of Lehman Brothers? One reason is the success of a counterrevolution that has progressively destroyed the Keynesian legacy. The final lecture proposes a sociological analysis of the macroeconomics involved and a diagnosis of the various factors and mechanisms that unite the profession towards major monetary and academic gain at the risk of making itself irrelevant.

 

 

 
Wednesday, April 15, 2015 | 5 p.m.

Success and Crisis of European Integration: The Role of Economic Theory and Expert Representations


 
Whereas Keynesian theory placed emphasis upon the positive role of public policies in reducing capitalism's intrinsic instability and inegalitarian nature, current classical macroeconomics postulates the contrary. The majority of economists have therefore been unable to understand the disequilibria associated with the combination of the euro with financial deregulation and high capital mobility across member states. The representations and cognitive maps of experts and policy makers have clearly played a role in a process that, from success, has evolved into failure.

 
Important publications
  • Keynes, J.-M., 1936: The General Theory of Employment, Interest and Money. Cambridge: Cambridge University Press.
  • Smets, Franj/Wouters, R., 2002: An Estimated Stochastic Dynamic General Equilibrium Model of the Euro Area. Working Paper No. 171. Brussels: European Central Bank, International Seminar on Macroeconomics.
Material used by this session
  • Boyer, R., 2012: The Four Fallacies of Contemporary Austerity Policies: The Lost Keynesian Legacy. In: Cambridge Journal of Economics 36, 283-312.
  • Boyer, R., 2013: The Euro Crisis: Undetected by Conventional Economics, Favored by Nationally Focused Polity. In: Cambridge Journal of Economics 37, 533–569,

 

 

 
Wednesday, April 22, 2015 | 5 p.m.

An Analytical History of Macroeconomic Theory since John Maynard Keynes (General Theory, 1936)


 
This lecture provides a panorama of the various paradigms and models that have been expounded since the foundation of macroeconomics. Whereas the many transformations of capitalist economies have demanded an updating of Keynes’ core hypotheses, the economic profession has been obsessed by a grand reunification of micro theory and macro economics. The victory of Walrasian foundations has not only created axiomatic foundations but also a complete irrelevance of theory for explaining the dynamics of innovation, the consequences of an extended welfare system, the opening of national economies, and, finally, the hegemony of finance.

 
Important publications
  • Ingrao, B./Israel, G., 1990: The Invisible Hand: Economic Equilibrium in the History of Science. Cambridge: MIT Press.
  • Caballero, R.J., 2010: Macroeconomics after the Crisis: Time to Deal with the Pretense-of-Knowledge Syndrome. In: Journal of Economic Perspectives 24(4), 85-102.
Material used by this session
  • Boyer, R., 1990: The Form of Organization Implicit in the General Theory: An Interpretation of the Success and Crisis of Keynesian Economic Policies. In: Barrère, A. (ed.), Keynesian Economic Policies. London: Macmillan, 117-139.
  • Boyer, R., 2013: Macroeconomics after the Crisis: Bringing Finance Back In. In: Benner, M. (ed.), Before and Beyond the Global Economic Crisis: Economics, Politics and Settlement. Cheltenham: Edward Elgar, 72-93.

 

 

 
Wednesday, April 29, 2015 | 5 p.m.

Why Has Leading Macroeconomic Thinking Become Irrelevant? Macroeconomics as a Profession


 
Such persistent failure by macroeconomists deserves explanation. What do economists actually do? Are they scientists in search of general laws or are they actors governed by the rules of their academic sub-fields? This lecture provides a range of evidence in support of the latter. The uncertainty of provisional findings nurtures a rational mimetism. Some economists (financial mathematicians, for example) are trapped by powerful economic interests, and others tend to develop only specialized approaches rather than burrowing to the foundations of their discipline. Last but not least, an unprecedented professionalization has generated excessive specialization, i.e., a quasi-anomy of the division of labor into sub-sub-disciplines. Each field believes they have the answer - but no one is considering economic theory's overarching architecture.

 
Important publications
  • Hempel, C.G., 1984: Methodology of Science: Descriptive and Prescriptive Facets. Mimeograph. Tel Aviv: Institute of Advanced Studies, Tel Aviv University
  • Durkheim, E., [1893]1997: The Division of Labor in Society. Translated by W.D. Halls. New York: Free Press.
Material used by this session
  • Boyer, R., 1992: La crise de la macroéconomie, une conséquence de la méconnaissance des institutions? In: L'actualité Economique 68(1-2), 43-68.
  • Boyer, R., 2012: La discipline économique des années 1930 à nos jours: d’un espoir prométhéen à une dramatique révision. In: Le Débat 169, Mars/Avril 2012, 148-166.
  • Boyer, R., 2013: The Present Crisis: A Trump for a Renewed Political Economy. In: Review of Political Economy 25(1), 1-38.

 

 

 

 

 

 
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