Great Leap Forward

Why is Paul Krugman Frustrated with Heterodoxy?

The blog-O-sphere has been lit up in recent days with Krugman’s announcement that he’s frustrated by the gloating of Heterodox Economists. He claims that with good hindsight, all the mainstream economists who “never saw the crisis coming” can use their flawed textbook approach to explain what happened. Gee, that makes me feel a lot better! So we don’t need to listen to those heterodox types who actually saw it coming, any more. Forget Minsky! Go back to ISLM models! Models that do not have banks–let alone shadow banks–or the potential for financial crises.

Stephanie Kelton led a podcast on the topic:

Mon, 28 April 2014

                        Randy Wray on Krugman and the Frustration of the Heterodox

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

If the link does not work, go to her site:

And if that does not work, look on the RHSidebar at NEP:

I’ll try to write a longer piece if I get time in the next few days.

One Response to “Why is Paul Krugman Frustrated with Heterodoxy?”

available1May 27th, 2014 at 11:01 am

You seemed sceptical on the issue of a "savings glut" could you elucidate on what this is and why your sceptical? Thanks.

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Aaron Menenberg is Foreign Policy and Energy analyst, and a Future Leader with Foreign Policy Initiative. He also co-hosts Podlitical Risk (@podliticalrisk). He is a graduate student in international relations at The Maxwell School of Syracuse University. Previously he has worked at Praescient Analytics, The Hudson Institute, for the Israeli Ministry of Defense, and at the IBM Corporation. The views expressed are his own, and you can follow him on Twitter @AaronMenenberg. He welcomes questions and comments at