Post-Keynesian Ideas For A Crisis That Conventional Remedies Cannot Resolve
Levy Institute Podcast: The Life And Legacy Of Wynne Godley In the series Levy At 40, Claudio H. Dos Santos, Gennaro Zezza, and Michalis Nikiforos talk about Wynne Godley in a podcast episode. The length is about 53m, and it is worth your time. Among other things they discuss how Wynne Godley had a strong [ ]
Recently Financial Times had an article A Keynesian Solution to Global Imbalances (‼) by Daire Macfedden. Martin Wolf at FT also discussed global imbalances in Why Global Imbalances Matter with the intro text: They lie at the intersection of almost everything that matters in geoeconomics and geopolitics. This is welcome, but you need to keep [ ]
In his newsletter, Chartbook, in a recent post Chartbook 442: Global imbalances – A new cocktail in old bottles: World Economy April 2026:, Adam Tooze discusses global imbalances but seems dismissive of the problem. For some, the continuing accumulation of US sovereign liabilities is a worry. It is true that the US Treasury borrows at rates [ ]
A few days ago, the IMF wrote about global imbalances, with this chart: The IMF’s analysis uses the identity: S − I = DEF + CAB where S is private sector saving, I is capital formation (investment), DEF is the government deficit, and CAB is the current account balance. You can move the government deficit [ ]
There are two recent articles about Wynne Godley and Francis Cripps, and their Cambridge Economic Policy Group, also called “New Cambridge economics”, and also on Nicholas Kaldor who was closely associated with it, although not part of it: The Political Crisis Of British Keynesianism, 1973–1983, by Colm Murphy. Prudence From The Left: Economic Restraint And UK [ ]
A lot of economists—which unfortunately includes some post-Keynesians—exaggerate the effect of tariffs and quotes on prices. Marc Lavoie has a nice explanation of how these claims are inconsistent with cost-plus pricing in his book Post-Keynesian Economics: New Foundations. From pages 555–556, (second edition)/509–510 (first edition): 7.5.3 Trade Protection The New Cambridge support for tariffs…
International trade is central in Wynne Godley’s models and work. Wynne Godley not just foresaw the unsustainability of US private sector imbalances and the return of Keynesianism, he also proposed non-selective protectionism for the United States. Over time, he thought that more international efforts are needed, such as changing how international institutions are run. In [ ]
While John Maynard Keynes understood that trade/current account deficits can become a problem, not just for a country with it but also for the whole world, he quite underplayed the role of international trade. (You can read about the downplaying in Nicholas Kaldor’s essay Keynesian Economics After Fifty Years, in the book Keynes And The [ ]
It seems that even post-Keynesians—with rare exceptions—are largely inattentive to open economy macro. Exceptions in this century are Wynne Godley and some people highly influenced by him. In an article Wynne Godley Calls For General Import Controls, for LRB, published in the year 1980, Wynne Godley, argued: For growth to be sustainable, it is essential [ ]
US President Donald Trump’s new tariffs seem haphazard but to me the reaction of people—including that of post-Keynesians—seems more interesting. The general reactions seem to be that the United States does not need to do anything. Across the political spectrum, people seem to peddle do-nothingism. The United States’ balance of payments and international investment position [ ]