ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

J W MasonSubscribe to J W Mason

Mapping India’s Finances

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.

A Response to Waknis

We thank Parag Waknis for his comment. If nothing else, it succeeds – albeit unintentionally – in providing a fine illustration of the problems with contemporary economics that our article described. In our article, we suggested that the methodology that has dominated economics for the last...

Strange Defeat

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.
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