Is macro in crisis?

Abstract

Yet again the failure of mainstream economics to address an economic crisis has promoted the idea that economics itself is in crisis. Throughout their careers, Marc Lavoie and Mario Seccareccia have contributed, not only to the critique of mainstream economics, but also to building up alternative theories and theoretical frameworks better suited to addressing real macroeconomic problems. This chapter is offered in honour of these contributions, focusing on the issue of how far it is feasible to establish agreement (among experts, far less the wider community) on the facts and causal mechanisms which provide the basis for macroeconomic policy. Is it a binary choice between fake news and truth? It is argued here that there is scope for different logics (types of reason) and different accounts of the facts, evident in the rise of populism. But this does not mean that any theory or any facts can be asserted. While experts seek truth, it is in general a matter for persuasion rather than demonstration (far less assertion). For persuasion of the wider population to be effective, institutional development is required to ensure that expert analysis makes a (two-way) connection with people’s real experience.