The last few decades have witnessed an outpouring of literature on macroeconomic models in the broad ‘heterodox’ tradition of Marx, Keynes, Robinson, Kaldor and Kalecki. These models yield an alternative analytical framework in which the big questions of our day – such as how inequality is related to growth or stagnation, and whether long-run growth is stable or unstable – can be fruitfully addressed. Heterodox Macroeconomics provides an accessible, pedagogically oriented treatment of the leading models and approaches in heterodox macroeconomics with clear, step-by-step presentations of core models and their solutions, properties and implications.
The book begins with an overview and comparison of heterodox and mainstream approaches to long-run growth. Next it covers the core classical-Marxian, neo-Keynesian and neo-Kaleckian models of growth and distribution in the heterodox tradition. Numerous contemporary extensions, developments and alternatives are then explored, including models of financial instability, ‘supermultiplier’ models, and debates about whether capacity utilization converges to a ‘normal’ rate. The book also gives extensive coverage to models of growth in open economies, emphasizing the role of Kaldorian cumulative causation in fostering divergence among national economies, and the limitations imposed by balance-of-payments constraints on countries that rely on export-led growth.