Why the Keynesians Lost the Debate

28 Apr

A recent paper by Farrel and Quiggin puts it bluntly:

“In 2008-2009, it was important that a relatively small number of ‘star’ economists, mostly based in the US, made vigorous arguments for Keynesianism. It was also important that some key figures who previously had not been favorably disposed to Keynesianism changed their minds. This helped prop- agate the idea of Keynesian stimulus to economists who otherwise would likely have been inoculated against it. Some of these economists – such as members of the Council of Eco- nomic Experts – played a key role in changing the field of debate within Germany and other European countries. Even if the actual consensus among economists was rather less solid than it appeared to outside observers, the appearance of an emerging consensus was what mattered.

In 2010 in contrast, it mattered that there was a greater degree of disunity among economists in the US and within the IMF than there had been in the previous period. It also mattered that a new group of elite economists – those associated with the European Central Bank – had entered the fray. The debate was not nearly as one sided as it had been in the first instance. The contagion of the previous period in part reversed its course.

Whether expert economists were deeply convinced, half-convinced, or not convinced at all by Keynesian ideas, did not matter as much as the external perception, in large part generated by patterns of propagation, that there had been a sea-change in the discipline. Strategic silences as well as Damascene conversions helped to perpetuate this perception.”

Farrel and Quiggin on Keynesian ideas_2012


One Response to “Why the Keynesians Lost the Debate”

  1. Development Studies at Brown November 26, 2012 at 17:37 #

    Reblogged this on Development Studies at Brown University.

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