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.

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Other Writing:

Academic Article

Linkage Politics and Complex Governance in Transatlantic Surveillance – with Abraham Newman

Henry Farrell and Abraham Newman (2018), “Linkage Politics and Complex Governance in Transatlantic Surveillance,” World Politics 40, 4:515-554. Globalization blurs the traditional distinction between high and low politics, creating connections between previously discrete issue areas. An important existing literature focuses on how states may intentionally tie policy areas together to enhance cooperation. Building on recent ...
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Academic Article

Trust and Political Economy: Comparing the Effects of Institutions on Inter-Firm Cooperation

Cooperation between small firms in “industrial districts,” where the production process may be radically dis-integrated, poses an important challenge to current political science theories of trust and cooperation. In this article, the author suggests that the problems posed by these districts—the existence of apparently irrational forms of trust in the political economy and of high-trust ...
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