Comparative Political Economy and Varieties of Macroeconomics

Abstract

The comparative study of advanced capitalist political economies emerged as a distinct subfield of political science in the late 1970s. A number of early contributions to this subfield sought to explain cross-national variation of macroeconomic performance, but the subfield increasingly focused its attention on other issues—the consequences of welfare states, industrial relations, and skill formation for innovation, competition, and the distribution of income—in the 15–20 years prior to the global crisis of 2007–2009. The crisis and its aftermath has ushered in renewed interest in macroeconomic management among comparative political economists. As in the past, this theme is linked to that of interdependence among capitalist economies and the room for partisan differences in macroeconomic policy priorities. In addition, recent contributions to comparative political economy distinguish growth models in terms of the role played by different components of aggregate demand and explore the distributive implications of divergent growth trajectories in countries that have traditionally been conceived as belonging to one or another variety of capitalism. With economic growth re-emerging as a central concern in the wake of the crisis, the New Keynesian tradition features prominently in recent efforts to put macroeconomics back into comparative political economy. However, comparative political economists also ought to engage with the Post-Keynesian tradition, which assigns a more important role to policy choices than the New Keynesian tradition. Positing that distributive conflict and power relations are critical to macroeconomic dynamics, the Post-Keynesian tradition provides useful analytical foundations for understanding the political foundations of divergent growth trajectories among advanced capitalist political economies.