Category Economics

From a broadly Keynesian viewpoint, output is demand determined. This suggests that fiscal policy, by affecting demand, can affect output and employment. At the same time, however, many Keynesians emphasize fundamental uncertainty. Firms’ output decisions depend upon expectations of future…

In the long run, a higher rate of economic growth implies a higher share of investment in income. This will necessarily correspond to a lower combined share of other forms of spending. Knowledge of this point sometimes leads to unfortunate…

The neoliberal approach to economic growth of the past forty years has been to drive down real wages, deregulate the financial sector, privatize various government functions, cut social expenditures and reduce taxes on large corporations and the wealthy. The period…

Macroeconomic controversies usually center on causation. Two questions of significance for policymaking concern output and growth: Is output demand or supply determined? Is economic growth demand or supply led? If demand is the driver of output and growth, there will…

An issue that troubles me in relating Marx to Modern Monetary Theory (MMT) is whether to apply the ‘productive/unproductive labor’ distinction to production that is monetized in a state money. Although I am not especially enamored of the distinction in…

Have you noticed how things we used to be able to do are beyond our capabilities now? We finally reached a point where we were able to provide free university education. Then we grew wealthier, and some countries couldn’t afford…

There appears to be a considerable degree of compatibility between Marx and various Kalecki- and Keynes-influenced approaches to macroeconomics. Compatibility, of course, does not imply that all these theoretical approaches stand or fall together. It simply suggests, to the extent…

This post concerns total value creation (Marx) in a context of demand-determined output and employment (Kalecki, Keynes). A ‘macro rule’ employed by Marx seems central to this connection. Marx held that, in real terms, an hour of average living labor…

In a recent post, JW Mason draws an insightful comparison: Conventional policy and functional finance represent two different choices about which instrument to assign to which target. The former says the interest rate instrument should focus on demand and the…

Sometimes the view is expressed that Marx’s theory, while perhaps applying to an earlier, competitive version of capitalism, has little relevance to the era of ‘monopoly capitalism’ in which we supposedly live today. This view seems to result from mistaking…