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ABSTRACT
Post Keynesians should not be afraid to teach what they believe represents the best explanation of macroeconomic fluctuations. Our colleagues in the mainstream certainly are not and, realistically speaking, it is hard to imagine that any student would be handicapped by not having had a full dose of IS-LM, the accelerationist hypothesis, Phillips Curves, and so on. Furthermore, there may not be a more opportune time to introduce post Keynesianism to undergraduate students with Neoclassicals still recovering from their inability to explain the financial crisis. This article argues for a post Keynesian-focused intermediate macroeconomics and offers a sample plan. It reviews the state of post-financial crisis mainstream macro teaching and references pedagogical literature in showing how a post Keynesian transformation and reorganization can be made most effective.
The author would like to thank without implicating the excellent suggestions offered by an anonymous referee.
Notes
1This contention is based both on anecdotal evidence and an online search for the intermediate macroeconomics syllabi and course materials used by post Keynesians. Although I would hesitate to call the latter exhaustive, the fact that it revealed that over 80% of such classes had as their core a standard Neoclassical model suggests that this is problematic even assuming a large margin of error. As suggested above, these data include universities well-known for their heterodox traditions.
2Another no doubt unintentional indictment of our discipline comes from Alan Blinder when, in discussing the common modeling assumption that only one interest rate exists, he writes, “So I do not think we can give that answer with a straight face any more—especially to principles students. (Graduate students will accept anything, as long as you tell them it is an assumption!)” (Blinder, Citation2010, p. 387). Quite right, they certainly will, as by then self-selection has removed almost all of those who are interested in the practical applicability of our theories.
3That he references the crisis as the Great Deviation betrays how much the mainstream views it as a black swan event.
4Something I attempted for many years.
5At My university, we offer an advanced macro course in which Monetarism, New Keynesianism, Real Business Cycles, and so on, are compared to post Keynesian approaches.
6My course has a heavy Keynes/Davidson emphasis. Someone taking a more Chartalist or Kaleckian approach might naturally have a different list (though many of the fundamentals would be the same).
7An anecdote supporting this contention involves one of my former students. I had no idea he had any interest in graduate school, and yet after graduation I received an email from him indicating that he was in the master’s program at the University of Missouri at Kansas City. When I asked what led him to this transformation, he said it was Keynes’ Z-D diagram. Nothing up to that point in his undergraduate career had ever made as much sense to him. It is a simple but very powerful tool.
8This is a simplification, of course. I do point out to students that Keynes allowed for certain elements of consumption to affect the intercept and for some varieties of investment impact the slope.
9I thoroughly enjoying setting them up to destroy another aspect of Friedman’s helicopter story during this part of the course. It does not take them too long (albeit with some guidance) to realize that he is actually engaging in fiscal, not monetary, policy.
10Several other lessons can also be drawn from these equations, including with respect to markup pricing. For that reason, some instructors may prefer to introduce this earlier so as to make use of it during the lectures on inflation.
11The introductory-level version of Mitchell et al. has already published (Citation2016) but the intermediate text is still being finalized. They were kind enough to send me a draft copy.
Additional information
Notes on contributors
John T. Harvey
John T. Harvey is a professor of Economics in the Department of Economics at Texas Christian University in Fort Worth, Texas.