Orthodox and heterodox theories of financial crises are hereby compared from a theoretical viewpoint, with emphasis on their genesis. The former view (represented by the fourthgeneration models of Paul Krugman) reflects the neoclassical vision whereby turbulence is an exception; the latter...

Using a monetary search model, Rocheteau, Rupert and Wright (2007) show that the relationship between inflation and unemployment can be positive or negative depending on the primitives of the model. The key features are indivisible labor, nonseparable preferences and bargaining. Their results...

Fiscal policy has become quite controversial in the post-Keynesian era, the debate over the Obama stimulus package being a contentious recent example. Some pundits go so far as to take the position that macroeconomic theory has failed to meaningfully progress in terms of providing useful...

The monetary economy has properties that cannot be analyzed using the tools of today's dynamic general equilibrium analysis. Keynes's economics, far from being an aberration in the otherwise orderly evolution of modern macroeconomics from Adam Smith's ideas about the "invisible hand", was a...

Building a model with three imperfect markets - goods, labor and credit - representing a product's life-cycle, we find that goods market frictions drastically change the qualitative and quantitative dynamics of labor market variables. The calibrated model leads to a significant reduction in the...

Unemployment may depend on equilibrium in other markets than the labor markets. This paper adresses this old idea by introducing search frictions on several markets: in a model of credit and labor market imperfections as in Wasmer and Weil (2004), I further introduce search on the goods market....

The paper combines Baumol's model of structural change with a model of aggregate demand growth in the Keynesian-Kaleckian tradition to predict the dynamics of aggregate employment. The model for the demand regime is estimated with - and Baumol's model for the productivity regime is calibrated on...

The Financial Crisis of 2008, and the Great Recession in its wake, have shaken up macroeconomics. The paradigm of the "New" Neoclassical Synthesis, which seemed to provide a robust framework of analysis for short-run macro not long ago, fails to capture key elements of the recent crisis. This...

This paper analyses financial crises from a theoretical point of view. For this it reviews what different schools of economic thought have to say about financial crises. It examines first the approaches that regard financial crises as a disturbing factor of a generally stable real economy...