Consensus, Dissensus and Economic Ideas: Economic Crisis and the Rise and Fall of Keynesianism – with John Quiggin

Henry Farrell and John Quiggin (2017), “Consensus, Dissensus and Economic Ideas: Economic Crisis and the Rise and Fall of Keynesianism,” International Studies Quarterly,61,1:269-283. Subsequent subject of an ISQ Symposium, featuring Paul Krugman, Elizabeth Berman, Stephen Nelson and Andrew Baker, with a response from the authors.

During the recent economic crisis, Keynesian ideas about fiscal stimulus briefly seemed to form the basis of a new expert consensus about how to deal with demand shocks. However, this apparent consensus soon collapsed into a continuing dissensus, with important consequences for policy. Neither conventional bargaining accounts nor existing theories of the role of ideas in policy outcomes easily explain the arc of international responses to the Great Recession. In this article, we propose that sociological arguments about professions, in conjunction with those about spaces of political contention as ecologies, provide a better understanding of the puzzle of Keynesianism’s rise and decline. The internal dynamics of prestige and status within the profession of economics intersected with policy arguments between states so as to make macroeconomic policy a “hinge” issue, over which coalitions in both ecologies contended. This explains how Keynesian economists and political actors worked together in the first phase of the crisis to advocate for and implement fiscal stimulus. It also explains why aggrieved policy actors, who did not favor stimulus, could help disrupt the apparent consensus in the second phase of the crisis by promoting the views of dissident economists.

Read the full article here

Other Writing:

Essay

A Most Lonely Union

In September 2019, two months before officially taking office, the new European Commission president was already insisting that the European Union needed to change. On the one hand, Ursula von der Leyen promised a new “geopolitical Commission,” but on the other, she wanted the EU “to be the guardian of multilateralism.” The difficult question was ...
Read Article
Essay

Web of Influence – with Daniel W. Drezner

Every day, millions of online diarists, or “bloggers,” share their opinions with a global audience. Drawing upon the content of the international media and the World Wide Web, they weave together an elaborate network with agenda-setting power on issues ranging from human rights in China to the U.S. occupation of Iraq. What began as a ...
Read Article