The Absence of Environmental Issues in the New Consensus Macroeconomics is only One of Numerous Criticisms

Abstract

This contribution focuses on the New Consensus Macroeconomics (NCM) theoretical framework. It outlines and gives a brief explanation of the main elements and way of thinking about the macroeconomy from the point of view of both its theoretical and policy dimensions. There are many problems with this particular theoretical framework. The most important in terms of the focus of this contribution is the absence of environmental issues. A number of further problems related to the New Consensus Macroeconomics, and its macroeconometric counterpart (Dynamic Stochastic General Equilibrium modelling), are summarised. We elaborate, though, on the problematic nature of the microfoundations of the macroeconomics dimension in the NCM theoretical framework in addition to the absence of environmental issues.