Special Forum on »Macroeconomic Theory and Macroeconomic Pedagogy«: The New Consensus in macroeconomics and non-mainstream approaches
Giuseppe Fontana and Mark Setterfield have edited an interesting book on the relationship between recent developments in macroeconomics and the teaching of the discipline at the undergraduate and intermediate levels (Fontana/Setterfield 2009). The editors have chosen to focus the book on the ›New Consensus‹ in macroeconomics, on criticisms of such an approach and alternatives to it. The ›New Consensus‹ is presented in its simplest version as it is presented when teaching macroeconomics at the introductory and intermediate level. The ›New Consensus‹ is characterized by a three-equation model. In this model, the quantity of money is endogenously determined and the ›old Keynesian‹ LM curve is abandoned. The collection of essays presented by Fontana and Setterfield offers a presentation of the ›New Consensus‹ model and critical alternatives to it by scholars engaged both in the mainstream and in the heterodox (mainly post-Keynesian) camps.