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The December issue of The European Journal of the History of Economic Thought features papers from the 26th ESHET conference held in Belgium in June 2023, focusing on the theme of "Fifteen years after the Global Financial Crisis." The issue includes diverse topics in economic thought, such as interpretations of Adam Smith's theory of money, John Stuart Mill's views on economic fluctuations, and Karl Marx's analysis of profit rates. Additionally, the issue explores the origins of modern social choice theory, the development of behavioural and experimental economics in France, and the influence of central bankers and academics on fiscal policy during the 2008 crisis. [Extracted from the article]

The imperfect coordination of expectations and actions is a central theme running through Keynes's General Theory. Incorporating this theme into mainstream macroeconomics, however, has proved to be a difficult endeavour. In particular, attempts to accommodate coordination failures within Dynamic Stochastic General Equilibrium (DSGE) models through multiple equilibria and "dynamic" indeterminacy, while promising in the 1990s, were gradually abandoned in the 2000s. Since then, the "New Keynesian" framework has come to dominate macroeconomic modelling. And since the coordination of agents is not at issue in this latter framework, mainstream macroeconomics has seemed to leave the coordination theme out of its focus, if not its scope. In this paper, we challenge this perception and argue that the coordination theme is actually alive and well. We especially present two recent research programmes which, while belonging to the DSGE paradigm, give pride of place to coordination failures and share a common objective: providing, within the class of DSGE models, an alternative to the New Keynesian framework that would involve the most important ideas emerging from Keynes's General Theory. [ABSTRACT FROM AUTHOR]

Half a century has passed since Robert Lucas got his paper on expectations and the neutrality of money published in the Journal of Economic Theory. That article is widely considered as pathbreaking, starting a movement that changed the professional standards of doing macroeconomics. It arguably also affected the perception, if not the conduct of monetary policy and other stabilisation policies. This roundtable discussion collects comments from a panel of experts in a combination of prominent macroeconomists who have gathered ample experience of work in central banks and other authorities, and historians of economic thought. [ABSTRACT FROM AUTHOR]

This paper highlights the renewed interest in Lucas's explanation of the non-neutrality of money put forward in his 1972 article – explanation based on information dispersion and signal extraction problems – by an increasing part of the literature investigating the transmission mechanism of monetary policy shocks. We review the main contributions to this renewal, and illustrate the relationship between this work and Lucas's own model. We also show that some of the assumptions made by this line of research have been questioned by subsequent developments on the same track, thereby challenging its ability to produce large amounts of monetary non-neutrality and calling for further research. [ABSTRACT FROM AUTHOR]

New Keynesian models for which firms unilaterally adjust labor along both the intensive, and extensive margins usually fail to reproduce the volatility of unemployment. In this paper, we show that a marginal wage much more responsive than the average wage to shocks—in accordance with empirical observations—is a crucial mechanism allowing these models to replicate unemployment dynamics. At the same time, the large movements of the marginal wage are consistent with the low volatility of inflation as such movements induce strong strategic complementarities between price setters. [ABSTRACT FROM AUTHOR]

Axel Leijonhufvud's On Keynesian Economics and the Economics of Keynes (1968) definitely belongs to the category of "classic" books. Its message—decentralised economies are prone to large increases in unemployment since communication failures prevent the optimal coordination of private decisions—is by now well understood. In this paper, we argue that even though most commentators correctly identify this message, they overlook two crucial aspects of Leijonhufvud's demonstration. These aspects relate to what the author calls the "aggregative structure" and the "transaction structure" of macro-models. We show that the former type of structure plays a central role in the emergence of unemployment in the "Economics of Keynes", while the latter type of structure explains why unemployment is "involuntary". [ABSTRACT FROM AUTHOR]

Karl Brunner and Axel Leijonhufvud constantly pointed out the prominence of imperfect information in macroeconomic analysis. This paper argues that, despite strong oppositions related to their rival schools of thought, this emphasis on informational problems led them to adopt similar views on many theoretical and methodological issues. These issues encompass the perception of the economic agent in society, the theory of price inflexibility and unemployment, the role of relative prices, the importance of signal-extraction problems and the position within the Marshall-Walras divide. [ABSTRACT FROM AUTHOR]