Too soon for obituaries: economics is alive and (reasonably) well
Author: Richard Pomfret, University of Adelaide
In a recent exchange on East Asia Forum, Steve Keen responded to a piece by McTaggart, Findlay and Parkin on ‘The state of economics’ with a post entitled ‘Why neoclassical economics is dead’.
From the virulence of the attack, Keen’s real concern seems to be that neoclassical economics is not dead – but that it should be. Neoclassical economics stands accused of becoming ‘positively sicker ever since the last great financial crisis – the Great Depression’ – and the upcoming Second Great Depression will finish it off.
Keen’s ‘neoclassical economics’ is a straw man. Modern economics owes a debt to the neoclassical economists of the late 1800s, but it has moved on since then – and since the economists of the 1920s whom Keynes derided.