Agent-Based Macroeconomics and Classical Political Economy: Some Italian Roots

New Macroeconomics and Political Science

■ Abstract We review the use of macroeconomics in political science over the past 40 years. The field has been dominated by new classical theory, which leaves little room for economic policy and focuses attention on what democratic governments can do wrong in the short term. The resulting literatures on political business cycles and central bank independence are large and sophisticated, but the...

New Open Economy Macroeconomics

Starting in the early 1990s, the New Open Economy Macroeconomics refers to a vast body of literature embracing a new theoretical framework for policy analysis in open economy, with the goal of overcoming the limitations of the Mundell-Fleming model, while preserving the empirical wisdom and policy friendliness of traditional analysis. Building general equilibrium models with imperfect competiti...

Some Political Economy Aspects of EMU

European Monetary Union (EMU) is here at last, but according to economists’ traditional perspective on economic policy making, it should not be. Given the nontrivial nature of this occurrence, it offers an important warning signal that policy economists need to reexamine our assumptions about the forces generating economic policy decisions. Economists, of course, have strong preferences for ana...

The New Political Macroeconomics

The paper surveys the ‘old’ and ‘new’ political macroeconomics. In the former we consider how governments can be seen to manipulate the economy as to satisfy opportunistic or ideological motives, thereby creating opportunistic or partisan political business cycles. We examine how the macroeconomic revolution of the 1970s cast doubts on the ability of governments to freely and repeatedly create ...

Sen, Sraffa and the revival of classical political economy