Kansas City, Hither 1 Come

I am getting ready for the UMKC Post-Keynesian Conference this week, as well as I mightiness non locomote publishing anything for a calendar week or two. I simply wanted to comment briefly on what I promise to give there.

Although I should locomote knuckling downward as well as finishing my upcoming mass on money, I convey started thinking close my adjacent project.

If nosotros are task a enquiry programme, nosotros demand to inquire ourselves (at least) ii questions:

1. What are nosotros hoping to accomplish?
2. Do nosotros hold off that the methodology nosotros are next volition permit us to give that goal?

The cleanest short-term analytical objective is to instruct a amend description of the concern cycle. (I volition eventually write a mass on inflation, but that is a after step.) The inquiry is -- tin give notice post-Keynesian theory instruct us there? My feeling is that is true, but I volition alone locomote able to convince myself of this if I tin give notice brand the illustration inward mass form.

(Although concern cycle analysis is plainly of involvement to fixed income analysts, it too touches upon other concerns on mightiness convey close the economy. Under Functional Finance, the "constraints" upon financial policy are defined inward damage of the outcome on inflation; hence, nosotros demand to convey an thought of what those limits are. Meanwhile, inflation is empirically tied to the concern cycle.) 

Why post-Keynesian economics? I am a gratis agent; at that spot is goose egg forcing me to follow whatsoever detail schoolhouse of thought. The brusk answer is that the alternatives seem worse. Mainstream economists wishing to projection the belief that mainstream economic science tin give notice explicate the concern cycle, but every bit I discussed at length inward Interest Rate Cycles, mainstream theory is reliant upon non-falsifiable round down logic. For example, increment is tedious because the "natural charge per unit of measurement of interest" is negative -- piece the methodology that is used to calculate the natural charge per unit of measurement of involvement is negative because increment has been slow.

Although it is welcome to come across civil intelligence betwixt mainstream macro as well as the post-Keynesian community (the articles I linked to hither supply examples), advances inward theory are alone going to come upwards from ignoring mainstream macro. The belief that mainstream macro is vibrant as well as that past times incorporating some frictions or things similar a financial sector is however non going to bargain alongside the non-falsifiable amount of the theory -- which is going to dominate the theoretical innovations added. The trickier inquiry is to what extent post-Keynesian theory is itself falsifiable.

This implies a strategy for what I demand to concentrate on at this conference: what are the post-Keynesian views on the concern cycle (keeping inward take away heed that at that spot are multiple schools of though inside post-Keynesian economics), as well as what kind of predictions tin give notice they locomote used to make? (And since I hold off to speak to some of my readers at the conference, that is what I should locomote yell for y'all about.)

(c) Brian Romanchuk 2016