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Publications
Books
Taylor, Lance
(2004) Reconstructing Macroeconomics: Structuralist Proposals
and Critiques
of the Mainstream, Cambridge MA:
Harvard University Press
 Macroeconomics
is in disarray. No one approach is dominant, and an increasing divide
between theory and empirics is evident.
This
book presents both a critique of mainstream macroeconomics from
a structuralist perspective and an exposition of modern structuralist
approaches. The fundamental assumption of structuralism is that
it is impossible to understand a macroeconomy without understanding
its major institutions and distributive relationships across productive
sectors and social groups.
Lance
Taylor focuses his critique on mainstream monetarist, new classical,
new Keynesian, and growth models. He examines them from a historical
perspective, tracing monetarism from its eighteenth-century roots
and comparing current monetarist and new classical models with those
of the post-Wicksellian, pre-Keynesian generation of macroeconomists.
He contrasts the new Keynesian vision with Keynes's General Theory,
and analyzes contemporary growth theories against long traditions
of thought about economic development and structural change.
Introduction
Macroeconomic
frameworks that constrain social and economic actors and aggregates
of their actions are the topic of this book. Diverse schools of
economists have proposed such schemes. A "structuralist" approach
based on social relations among broad groups of actors is emphasized
herein.
In
the North Atlantic literature, structuralism's intellectual foundations
lie within a complex described by labels such as [Original, Neo,
Post] - [Keynesian, Kaleckian, Ricardian, Marxian] which non-mainstream
economists have adopted; numerous variants exist in developing countries
as well. The fundamental assumption of all these schools is that
an economy's institutions and distributional relationships across
its productive sectors and social groups play essential roles in
determining its macro behavior.
The
approach adopted here also puts a lot of emphasis on accounting
relationships as built into national income and product accounts
and flows of funds. These relationships constrain the numbers presented
in the accounts, which are the fundamental data of macroeconomics.
Almost needless to say, the conventions used in building macro level
accounts are anything but objectively given. They arose historically
in reflection of the debates around the Keynesian system, and serve
social and political ends. The accounts are mostly estimated on
the basis of data collected for other purposes such as taxation
and are by no means a clear reflection of what is going on in the
"real" economy, out there. But they still define the realm of macroeconomic
discourse and have to be accepted and utilized as such.
More
importantly, market-balance restrictions constrain the outcomes
of decisions made by economic actors - not every actor can have
a trade surplus with all the others, for example. In practice such
statements can be rephrased in terms of macro level "sectors" and
"institutions" such as households, non-financial business, financial
business, government, and the rest of the world (in one familiar
scheme). A distinguishing feature of structuralist theories is that
they are constructed directly in terms of aggregates such as household
consumption, business investment, total exports, and so on. Few
if any appeals are made to optimizing decisions allegedly made by
individual "agents," in contrast to most mainstream (especially
Anglo-American) macroeconomics.1
Contents
| Chapter
One |
Social
Accounts and Social Relations
1. A Simple
Social Accounting Matrix
2. Implications of the Accounts
3. Disaggregating Effective Demand
4. A More Realistic SAM
5. Stock-Flow Relationships
6. A SAM and Asset Accounts for the United States
7. Further Thoughts
|
| Chapter
Two |
Prices
and Distribution
1. Classical
Macroeconomics
2. Classical Theories of Price and Distribution
3. Neoclassical Cost-Based Prices
4. Hat Calculus, Measuring Productivity Growth, and Full Employment
|
| Equilibrium |
5. Mark-up Pricing in the Product Market
6. Efficiency Wages for Labor
7. New Keynesian Crosses and Methodological Reservations
8. First Looks at Inflation |
| Chapter
Three |
Money,
Interest, and Inflation
1. Money
and Credit
2. Diverse Interest Theories
3. Interest Rate Cost-Push
4. Real Interest Rate Theory
5. The Ramsey Model
6. Dynamics on a Flying Trapeze
7. The Overlapping Generations Growth Model
8. Wicksell's Cumulative Process Inflation Model
9. More on Inflation Taxes
|
| Chapter
Four |
Effective
Demand and its Real and Financial Implications
1. The
Commodity Market
2. Macro Adjustment via Forced Saving and Real Balance Effects
3. Real Balances, Input Substitution, and Money Wage Cuts
4. Liquidity Preference and Marginal Efficiency of Capital
5. Liquidity Preference, Fisher Arbitrage, and the Liquidity
Trap
6. The System as a Whole
7. The IS/LM Model
8. Keynes and Friends on Financial Markets
9. Financial Markets and Investment
10. Consumption and Saving
11. "Disequilibrium" Macroeconomics
12. A Structuralist Synopsis
|
| Chapter
Five |
Short-Term
Model Closure and Long-Term Growth
1. Model
"Closures" in the Short Run
2. Graphical Representations and Supply-Driven Growth
3. Harrod and Related Stories
4. More Stable Demand-Determined Growth
|
| Chapter
Six |
Chicago
Monetarism, New Classical Macroeconomics, and Mainstream Finance
1. Methodological
Caveats
2. A Chicago Monetarist Model
3. A Cleaner Version of Monetarism
4. New Classical Spins
5. Dynamics of Government Debt
6. Ricardian Equivalence
7. The Business Cycle Conundrum
8. Cycles from the Supply Side
9. Optimal Behavior under Risk
10. Random Walk, Equity Premium, and Modigliani-Miller Theorem
11. More on Modigliani-Miller
12. The Calculation Debate and Super-Rational Economics
|
| Chapter
Seven |
Effective
Demand and the Distributive Curve
1. Initial
Observations
2. Inflation, Productivity Growth, and Distribution
3. Absorbing Productivity Growth
4. Effects of Expansionary Policy
5. Financial Extensions
6. Dynamics of the System
7. Comparative Dynamics
8. Open Economy Complications
|
| Chapter
Eight |
Structuralist
Finance and Money
1. Banking
History and Institutions
2. Endogenous Finance
3. Endogenous Money via Bank Lending
4. Money Market Funds and the Level of Interest Rates
5. Business Debt and Growth in a Post-Keynesian World
6. New Keynesian Approaches to Financial Markets
|
| Chapter
Nine |
A
Genus of Cycles
1. Goodwin's
Model
2. A Structuralist Goodwin Model
3. Evidence for the United States
4. A Contractionary Devaluation Cycle
5. An Inflation Expectations Cycle
6. Confidence and Multiplier
7. Minsky on Financial Cycles
8. Excess Capacity, Corporate Debt Burden, and a Cold Douche
9. Final Thoughts
|
| Chapter
Ten |
Exchange
Rate Complications
1. Accounting
Conundrums
2. Determining Exchange Rates
3. Asset Prices, Expectations, and Exchange Rates
4. Commodity Arbitrage and Purchasing Power Parity
5. Portfolio Balance
6. Mundell-Fleming
7. IS/LM Comparative Statics
8. UIP and Dynamics
9. Open Economy Monetarism
10. Dornbusch
11. Other Theories of the Exchange Rate
12. A Developing Country Debt Cycle
13. Fencing in the Beast
|
| Chapter
Eleven |
Old
and New Theories of Growth and Development
1. New
Growth Theories and Say's Law
2. Distribution and Growth
3. Models with Binding Resources and Sectoral Supply Constraints
4. Accounting for Growth
5. Other Perspectives
6. The Mainstream Policy Response
7. Where Theory Might Sensibly Go
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| References |
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