Monday, April 9, 2012

Finding Common Ground

Steve Randy Waldman recently penned an encouraging post on the recent, heated debates in the econ blogosphere, posing the question, “Because the stakes are so small?” Waldman’s question refers to the common desire amongst various schools of economics to improve the current status quo in monetary and fiscal macro policy. The stakes in this game are a world with greater economic growth and less uncertainty about the future, goals that are certainly well worth the effort.

Waldman is the ultimate student of economics, striving to understand the strengths and weakness of different theories spanning Post-Keynesian, Market Monetarism, New Keynesian, MMT, Austrian and surely others. From his perspective, proponents of the different theories have much to gain from finding areas of common ground rather than arguing over their differences. The article offers a jumping off point for this discussion and is well worth a full reading.

The desire to highlight this blog post, in particular, is because my own intellectual pursuit in economics continues to include all of the various sects listed above. I’m often struck by the amount of overlap in thought process and general policy prescriptions, even if the details are, at times, worlds apart. Stemming from my personal experience, Post-Keynesians and Austrians often agree on the importance of private bank credit in determining business cycles. Market Monetarists and MMTers recognize the interplay and sometimes counteracting effects of monetary and fiscal policy. Nearly all the groups seem to prefer making both types of macro policy less ad hoc and more quickly responsive to business cycles. This is just the tip of the iceberg and I hope to read about and find far more similarities as I continue my studies.

Speaking of studies, I’m currently faced with the dilemma of choosing between two doctoral programs in economics that promote different types of heterodox economics. One program is more closely aligned with the Post-Keynesians, while the other is associated with the Austrian tradition. Waldman’s post offers hope that whichever program I chose, the opportunity will remain open to incorporate the best ideas among alternative theories. I certainly plan to seek alliances in my career and sincerely hope that many leaders in the field will follow Waldman’s lead in finding some common ground that helps improve outcomes for us all.  

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