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This article implies that the time is ripe for a new paradigm in economic theory comprising classical (Ricardian) and Keynesian elements of analysis. The central Section Five presents the basic equations of classical-Keynesian political economy, the price and the quantity equation, based on three constitutive principles: the classical labour value and surplus principles and the Keynesian principle of effective demand. Subsequently, two employment mechanisms implied in the super-multiplier relation, the classical-Keynesian quantity equation, are mentioned, the internal and the external employment mechanism. Section Seven provides an analysis of the actual situation on the basis of the external employment mechanism, associated with cumulative processes of increasing disequilibria and inequalities. Given this, it ought to be replaced by the internal employment mechanism, allowing for Keynesian employment and distribution policies (Section Eight). However, the internal mechanism can only be implemented if a new world economic order is brought about, based upon a supranational currency, that is, Keynes's bancor, to ensure balance of current account equilibria worldwide. Section Ten sets forth Keynes's social liberalism, the social philosophy underlying classical-Keynesian political economy, the fundamental social ethical value of which is the Common Good. Social Liberalism thus emerges as the alternative to Capitalism and Socialism. [ABSTRACT FROM AUTHOR]

Only twelve years after the global financial crisis, in 2020 the world was again in economic crisis. This time around, the source of the crisis was the COVID-19 global pandemic, which has affected the economy differently than the global financial crisis. However, as they were in 2008–2009, conventional macroeconomic theory and models have once again been found wanting, and economists have again turned for insights to the work of Keynes and more recent post-Keynesian scholars. This paper explores a simulation of the macroeconomic impacts of COVID-19 using the E3ME macro-econometric model. It describes two potential recovery packages, one of which could be described as 'green'. The modelling shows that the green recovery package could support the global economy and national labour markets through the recovery period, outperforming an equivalent conventional stimulus package while simultaneously reducing global CO2 emissions by 12%. A green recovery plan is assessed against a reference scenario with COVID-19. It outperforms a non-green recovery plan of comparable value, while also reducing CO2 emissions by up to 12% below the reference scenario (15% below no-COVID baseline). The policies in the green recovery plan provide different relative impacts. Car scrappage schemes that promote the uptake of electric vehicles have the largest impact on GDP and jobs. Renewables, energy efficiency and electric vehicle promotion all have large impacts on emissions. The green recovery plan boosts production levels in all sectors of the economy except for energy and utilities. It boosts the consumer services sector that has been most affected initially by the pandemic but also the investment sectors that could suffer longer-term damage. [ABSTRACT FROM AUTHOR]

This paper celebrates the contributions to Keynesian theory of the late Brazilian economist Fernando Cardim de Carvalho (1953–2018). We use Carvalho's 12 refereed English-language papers on Keynesian theory — the first published in 1983, the last in 2016 — as a point of departure for reflecting on two questions confronting macroeconomists today. First, what is the work of the economist — in what does economic analysis consist? Second, in this post-crisis era, how might macroeconomics — and specifically Keynesian macroeconomics — be rebuilt? Carvalho's writings show that the work of the economist can be as much about understanding the raw elements of human behavior in the real world — what we will call the foundational level of analysis — as about constructing models depicting the momentum of economic systems incorporating these behaviors. Adopting this approach to the practice of theory leads to insights and frameworks that would be lost if macroeconomic theorizing were equated with formal model building: it will enrich exchanges among economists, deepen the conceptual roots of Post Keynesian macroeconomics, and facilitate interdisciplinary exchange. [ABSTRACT FROM AUTHOR]