How to promote alternative macroeconomic ideas: are there limits to running with the (mainstream) pack?

Abstract

The paper discusses the merits and risks of heterodox economists using mainstream economic models, and especially dynamic stochastic general equilibrium (DSGE) models, to promote economic policy conclusions usually found in post-Keynesian economic thought such as large fiscal multipliers, importance of distributional issues for macroeconomic stability, and the role of endogenous money creation for the explanation of economic downturns after a banking crisis. It argues that using these models can help heterodox researchers to communicate with mainstream economists and might help to further one's personal academic career, but that such a strategy comes along with the risk of having to accept other, very questionable policy conclusions and of stabilizing the use of the DSGE models in mainstream economics, hence potentially delaying a Kuhnean-type ‘scientific revolution’ in macroeconomics.