Articles by Arjun Jayadev

.

As a useful adjunct to other macroeconomic accounts, this paper describes financial flows between different sectors of the Indian economy from 1955 to 2015. It finds that the consolidated government sector has the largest net deficit, while the households sector has the largest net surplus. The private corporate sector is running larger deficits than at any other time in the past, implying more reliance on external credits. With liberalisation and globalisation, the rest of the world sector is now the second-largest net surplus sector in the economy.

Macroeconomics in the United States today appears to be a site of intense controversy between supporters of more aggressive stimulus measures and supporters of austerity. These policy debates, while important, tend to obscure the strong methodological and theoretical consensus in the economics profession today. All major schools of mainstream macroeconomics are committed to a vision of the economy in which rational agents choose the optimal path over time, and in which any sources of instability are fully offset by a benevolent central bank, at least in normal times. These core intellectual commitments of modern economics have contributed to the weakness of efforts to reduce unemployment in the US and Europe. This paper first describes the intellectual failure of the most prominent arguments for austerity, and then argues that the deeper consensus in macroeconomics has nonetheless made it difficult to make consistent arguments for sustained deficit spending or for making lower unemployment a high priority relative to other macroeconomic goals.

The Occupy movement with its myriad signs and slogans still appears to be an inchoate protest movement railing against economic inequality, free market capitalism and its most visible institution - Wall Street in the United States. But its unmistakable insistence on taking on the established political parties - including the Democrats - and its radical democratic form of organisation suggest a new ambitious grass-roots politics with the potential to mature further.

The report of the United Nations Commission on reforms of the international monetary and financial system goes beyond making a critique of the paradigm that has held hegemonic sway over economic thinking and policy. It focuses on the enormous challenges that the world faces beyond the immediate crisis. This article provides an overview that illustrates the potential of the report to be a blueprint for creating a new global order.