Managing Macroeconomic Neoliberalism: Capital and the Resilience of the Rational Expectations Assumption since the Great Recession

Oddný Helgadóttir*, Cornel Ban

*Corresponding author for this work

Research output: Contribution to journalJournal articleResearchpeer-review

Abstract

There is little systematic work on how much the core of mainstream macroeconomics has changed since the crisis of 2008 and even less on what explains patterns of stability and change. This paper addresses this gap by first, mapping out debates over the core assumption of rational expectations in high-prestige academic publications and the research of central banks of systemic importance and second, deploying a sociological perspective to assess the various forms of capital deployed by orthodox defenders, radical challengers and constructive critics of this assumption. The paper finds that although the core of modern macro has seen a more robust radical challenge than one might have expect, the defense of rational expectations remained quantitatively dominant and substantively elastic. While radical challengers had access to significant material resources and symbolic capital, orthodox players control the institutions of the economics profession via editorial boards and refereeing for the top journals. As such, the orthodox exercise a strong gatekeeping function that allows some pluralism yet also goes some way toward explaining their continued intellectual dominance.
Original languageEnglish
JournalNew Political Economy
Volume26
Issue number5
Pages (from-to)869-884
Number of pages16
ISSN1356-3467
DOIs
Publication statusPublished - Oct 2021

Bibliographical note

Published online: 8. Januar 2021.

Keywords

  • Macroeconomics
  • Economists
  • Economic ideas
  • Rational expectations
  • Neoliberalism
  • Capital

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