Randy Wray on Krugman and the Frustration of the Heterodox

Depending on where you start the process of getting to the podcast below, the headline is either Randy Wray on Krugman and the Frustration of the Heterodox or Stephanie Ketlon Talks with Randy Wray.

A broad-ranging discussion of conventional economics and the heterodox alternatives to IS/LM, Ricardian equivalence, etc.

Most economists who have finally come back to the real world after the 2008/2009 economic crash think that we need more government stimulus.   The people who are proponents of Modern Monetary Theory have known this for several decades before the current crisis.  The Neo-Keynesians like Krugman and Summers seem to have come to the realization more recently and perhaps for the wrong reasons.

This podcast explains why it is necessary to understand the correct reasons for why there is agreement on what the short term policy needs to be.  If you get to the right short-term policy by way of the wrong reasons, then you will get the long-term policy all wrong.

One of the things that the MIT philosophy taught me is that it is not enough to come up with the right answer, you need to come up with the right answer for the right reasons.  As I said above, if you come up with the right answer for the wrong reasons, you are very likely to come up with the wrong answer the next time you apply the wrong reasons to solving a problem.

By the way, the Google definition of heterodox is – not conforming with accepted or orthodox standards or beliefs.  It is silly to lump all heterodox economists in one category.  Perhaps there are only a few ways to define what orthodox economists think, but heterodoxy is just everything else.

You can well imagine that heterodoxy can range from the sublime to the ridiculous.

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