New Economics

Carlos Obregón Díaz

MPRA Paper from University Library of Munich, Germany

Abstract: None of the known macroeconomic theories are adequate to understand what to do in a global crisis like the 2020 Global Pandemic. Rational Expectations and monetarism cannot even ex-plain how is that a global crisis like this happens. The IS-LM model was designed to manage business cycles, but not to confront major crises. And Keynes economics was written many years ago, based in volatile investors expectations that do not describe the present situation. There is a need of a new economic theory. The main problem of traditional economy is that it has not taken seriously the need to explore the characteristics that the institutional arrangement must have for markets to operate properly. The idea that free markets work by themselves, have perniciously enter into microeconomics, macroeconomics and economic growth theory. And as a consequence we do not have today solid microeconomic foundations for the re-quired macroeconomic policies to confront major crises; and neither for adequate models of economic growth for the world at large, nor for underdeveloped economies. We need a new economic theory. The main purpose of this manuscript is to delineate the route towards the consolidation of such a new theory.

Keywords: macroeconomic; theories; Pandemic; Rational Expectations; global crisis; Carlos Obregón; Keynes; investors; new economic theory; institutional arrangement; microeconomics; economic growth; policies; theory (search for similar items in EconPapers)
JEL-codes: A1 A10 A11 A12 A13 A14 A19 B00 D0 D00 D01 D02 D03 D04 D50 D51 D52 D53 D57 D58 D70 D71 D78 E00 E02 E03 E60 E61 E63 N10 P00 (search for similar items in EconPapers)
Date: 2020-11-05
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