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There is controversy among economists over just what it is that economists should do. The controversy is centered on the question whether what is called \"neoclassical\" or \"mainstream\" economics provides the appropriate template for performing economic analysis. Neoclassical economics is based on the principle that economic behavior is guided by \"rational choice, \" i.e., choice based on reason rather than sentiment. Challenges to this principle come from several fields of study: behavioral economics, neuroeconomics, Austrian economics, Keynesian economics, and others. A common thread running through these fields is that the rational choice assumption is unrealistic and therefore not useful for analyzing economic policy choices. It is important, however, to distinguish between economic policy choices, which are frequently irrational, and how individuals are observed to react to these choices. Examples of irrational policy choices are minimum wage laws, buy-American rules, and corporate tax increases. The job of the economist is to play a role akin to that of preachers, in exposing such choices for their irrationality. Mainstream economics shows that people react to these choices in a manner that impairs the performance of the economy.

With its emphasis on real-world assumptions above theoretical neatness, and the centrality of money within its theoretical framework, post-Keynesian economics offers important insights into understanding how modern day economies work, where financial services and flows dominate the performance of economies. In this advanced introduction, Matteo Iannizzutto showcases post-Keynesianism's contributions to such central issues as the fundamental uncertainty in economic decisions, the theory of liquidity preference, effective demand and nominal contracts. In each case the author presents the strength of post-Keynesian ideas alongside those of mainstream economics and shows their explanatory power in the light of the financial crisis. The author also explores the implications for policy prescriptions arising out of his post-Keynesian analysis, such as supporting the level of employment and regulation and segmentation of financial markets.

In August 2007, when the first signs emerged of what would come to be the most damaging global financial crisis since the Great Depression, the New Keynesian paradigm was dominant in macroeconomics. Ten years later, tons of ammunition has been fired against modern macroeconomics in general, and against dynamic stochastic general equilibrium models that build on the New Keynesian framework in particular. Those criticisms notwithstanding, the New Keynesian model arguably remains the dominant framework in the classroom, in academic research, and in policy modeling. In fact, one can argue that over the past ten years the scope of New Keynesian economics has kept widening, by encompassing a growing number of phenomena that are analyzed using its basic framework, as well as by addressing some of the criticisms raised against it. The present paper takes stock of the state of New Keynesian economics by reviewing some of its main insights and by providing an overview of some recent developments. In particular, I discuss some recent work on two very active research programs: the implications of the zero lower bound on nominal interest rates and the interaction of monetary policy and household heterogeneity. Finally, I discuss what I view as some of the main shortcomings of the New Keynesian model and possible areas for future research.

The right of governments to employ capital controls has always been the official orthodoxy of the International Monetary Fund, and the organization's formal rules providing this right have not changed significantly since the IMF was founded in 1945. But informally, among the staff inside the IMF, these controls became heresy in the 1980s and 1990s, prompting critics to accuse the IMF of indiscriminately encouraging the liberalization of controls and precipitating a wave of financial crises in emerging markets in the late 1990s. In Capital Ideas, Jeffrey Chwieroth explores the inner workings of the IMF to understand how its staff's thinking about capital controls changed so radically. In doing so, he also provides an important case study of how international organizations work and evolve.

This article explores the relationships between post-Keynesian economics and feminist economics. It distinguishes three key concepts in each tradition that recommend serious attention in the other tradition: gender, the household and unpaid work and caring as key concepts in feminist economics; uncertainty, market power and endogenous dynamics as core concepts in post-Keynesian economics. This article will show, with reference to the literature in which such cross-fertilisation has been explored already, how both traditions can be enriched from a stronger mutual engagement.

The purpose of this paper is to contribute to the post-Keynesian/Kaleckian macroeconomic literature. We develop a macroeconomic model that explicitly integrates the role of borrowing and cash payment commitments on outstanding debt (interest plus principal repayment) into the consumption and investment expenditures, as well as into the inflation-generating process. We explore the way that finance influences the distribution effects of inflation in the demand-side of a money/credit-using economy; we suggest a new Phillips curve that encapsulates the impact of financial commitments on wage and profit claims. We argue that high debt and cash payment commitments are likely to be associated with a positive demand-side effect of inflation on the rate of employment; and that they might be conducive to a negative supply-side effect of employment on the inflation rate.