Post-Keynesian Economics: New Foundations, by Marc Lavoie
Chapter 7: Open Economy Macroeconomics

ABSTRACT

Reviewing Marc Lavoie’s comprehensive and well-structured discussion of open-economy macroeconomics allows us to revisit some key Post-Keynesian contributions and confirm their continued relevance to our understanding of international economic, financial and monetary relations. In the process Lavoie draws a consistently sharp contrast with standard-theory concepts and models, much of it organized around his elaboration of endogenous money in an international context and modern trade flows embedded in a highly globalized and financialized world economy which have little to do with comparative advantage. He thereby provides us with a conceptual road map for a meta-economic revolution which recognizes that the world economy has a growth dynamic all of its own rather than being just the sum of its parts, the two-hundred or so national economies connected to each other through their balance of payments and exchange rates.

KEYWORDS:

• Heterodox (Post-Keynesian) theory
• open-economy macroeconomics
• balance of payments
• endogenous money
• exchange-rate regimes
• varieties of (Financial) capitalism
• trade policy
• open-economy growth models

JEL CODES:

• B 50
• E5
• F1
• F3
• F4
• F6

Acknowledgements

[I/we] would like to use this opportunity to acknowledge and thank the reviewers who reviewed this article and aided in its publication.

Disclosure Statement

No potential conflict of interest was reported by the author(s).