"Neoclassicism owes its hegemonic position in the social sciences to this most peculiar, axiomatically inbuilt, theoretical failure." So says Yanis Varoufakis, Professor of Economic Theory at the University of Athens, Greece. In this working paper, he defines three meta-axioms that characterize neoclassical economic theory. Confronted with a theoretical challenge, the meta-axioms begin to dance. Quickstep, move, and shuffle -- that is how neoclassicism defends its hegemony,...

Adair Turner, Chairman of the UK Financial Services Authority (FSA), recently gave the presidential lecture at the Centre for Financial Studies in Frankfurt, Germany: "Debt and Deleveraging: Long Term and Short Term Challenges". Paper here and slides here. AttachmentSize turner-frankfurt-slides.pdf516.01 KB turner-frankfurt-speech.pdf231.05 KB

In response to the walkout staged by students in the intro economics class at Harvard, INET launched the syllabus project 30 Ways to Teach Economics. We invited professors and students to send us syllabi, and to share their experience with teaching and learning intro economics. Here are three responses, from Bruce Caldwell, Duncan Foley, and Stephen Ziliak. Another response comes from Robin Wells. In this essay, she warns teachers of letting the classroom become disconnected from the...

In response to the walkout staged by students in the intro economics class at Harvard, INET launched the syllabus project 30 Ways to Teach Economics. We invited professors and students to send us syllabi, and share their experience with teaching and learning intro economics. Here, you can read about three different courses. Find more syllabi here. Macroeconomics without the AS-AD model Duncan Foley, Leo Model Professor of Economics at the New School for Social Research, tells us that he...

INET published a paper, written by John Kay, that deals with the relationship between economics and the world we live in. The Map Is Not the Territory: An Essay on the State of Economics spells out methodological critiques of economic theory in general, and of DSGE models and rational expectations in particular. INET forwarded Kay's paper to a handful economists and invited them to respond (Harald Uhlig, Michael Woodford, Paul Davidson, and Roger Guesnerie). Here, we offer a perspective...

The neoclassical vision of saving and lending -- the standard model being taught in universities -- causes economists to be blindsided by the dynamics of debt in the economy, according to Steve Keen. In part 3 of this INET interview, Keen talks about the role of private debt in the economy. It is true that one person's debt is another person's asset, but it is equally true that banks create money when they lend. This kind of endogenous expansion of debt, Keen says, drives economic...

Last week, Harvard students staged a walkout to draw attention to the bias they perceive in the intro economics course. The Harvard students are not alone, and the staged walkout is not the first protest against the economics curriculum. In June 2000, economics students in Paris circulated a petition calling for the reform of their curriculum. What began as a protest of French students developed into the Post-Autistic Economics Movement. A brief history of the movement here....

Yesterday, Harvard students of Ec 10 staged a walkout to draw attention to the bias they detect in the course. Here is their open letter to the professor, Greg Mankiw. Curriculum reform has been central to INET's own project from the beginning. Here is the work of the Economics Curriculum Committee to date. Based on that work, INET would redirect the criticism of the students away from the bias of any particular professor or course offering. The problem rather lies in an...

The two intersecting lines of supply and demand penetrate economics textbooks like Einstein’s mass-energy equivalence penetrates physics textbooks. The theory behind the two lines is inherently flawed, says Steve Keen. It is not possible logically to derive from individuals and their preferences the aggregate demand and supply curves presented in economic textbooks – unless one is willing to make a host of unrealistic assumptions, such as that all people are alike. That is why the...