Is Post-Keynesian Economics Catching On?

by: Cullen Roche

One thing that has surprised me is how little push-back there has been against mainstream economics since the financial crisis. There's been considerable debate about the problems in mainstream macro, but there hasn't been much progress in terms of changing the economic models that failed to predict the financial crisis and understand how to resolve it. What's even more baffling is that many Post-Keynesian economists not only predicted the financial crisis and the Euro crisis, but they also made countless accurate predictions about how the post-crisis period would unfold. If you used a model like the one I use you knew the following:

These were big time predictions. And my framework, while not entirely Post-Keynesian Economics, is closer to PKE than it is to anything else. I doubt there is another school of economics that would have produced such wide ranging accurate predictions. But the ideas don't seem to be catching on all that much. Yes, there was some good news over the weekend that Stephanie Kelton (a MMT Post-Keynesian Economist) will be the minority Chief Economist on the Senate Budget Committee. But I still don't see the right people taking PKE seriously. And it's clear that mainstream economists view PKE supporters as outsiders looking in. It's a very frustrating state of affairs. And one that doesn't give me a good deal of hope about the state of future policy.