A Post-Keynesian Perspective
Chapter 3: The Macroeconomic Landscape: An Example of an Ontological Reflection
The general [Post-Keynesian] methodological approach is an open system approach, involving collections of partial analyses that aim to build up a (fallible) knowledge of different aspects of socioeconomic systems. Rather than relying on a single, formal method, a range of methods are employed (formal, institutional, and historical for example) that draw on different types of evidence. (Dow, 2001: 16–17) THE SOCIALLY EMBEDDED MACROECONOMIC VISION The subject of this book is macroeconomic methodology as a means of understanding ‘the economy as a whole’, an expression often used by Keynes to demarcate his field of research. No macroeconomic phenomenon can be analysed in a state of isolation. The macroeconomic system is an interconnected whole. A realistic macroeconomic approach requires the development of a macroeconomic theory and method that correspond to the social reality. It is the relevance of the theory and method that determines the quality of the knowledge we are able to acquire. For this reason I will first illustrate the macroeconomic perspective in a context that comprises society as a whole. I will then review a series of simplifications of reality, which will provide a basis for a realistic macroeconomic analysis. The overall dynamics of society has to be considered as an interconnected process. In this perspective, the macroeconomic phenomena are connected with the other social sciences in a common ‘social reality’. They are, in the words of Karl Polanyi, ‘socially embedded’. The division into disciplines such as economics, law, politics and sociology tends to create a set of...
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