Response to Cornel Ban’s review of The Currency of Confidence: How Economic Beliefs Shape the IMF’s Relationship with Its Borrowers

• Published in: Perspectives on politics Vol. 16; no. 3; pp. 789 - 790
• Main Author: Nelson, Stephen C.
• Format: Journal Article
• Language: English
• Published: New York, USA Cambridge University Press 01.09.2018
• Subjects: Cartwright, Nancy; Critical Dialogue; Keynesian theory; Mundell, Robert; Neoliberalism; Trust; Chicago Illinois
• ISSN: 1537-5927; 1541-0986
• DOI: 10.1017/S1537592718001196

[...]in Ban’s view, this conceptualization is problematic because it is at once too restrictive to be able to accommodate the offshoots that we might want to call “neoliberal” but which would dispute one or more of the elements in my conceptualization (e.g., economists from the Austrian school who disliked the formalization of orthodox economic theories)—and it is insufficiently restrictive to be able to exclude “neo-Keynesians” who are not neoliberals but might share an affinity with one or more of the pillars. [...]from the 1950s onward, the design of the Fund’s lending programs was based on the “financial programming” model, which was built on classical Humean—not Keynesian—foundations. [...]Robert Mundell took to calling it the “Hume-Polak” model after the IMF economist who originated the Fund’s monetary model.) Likewise, Ban suggests that neo-Keynesian beliefs (the content of which is not defined in the review or in Ruling Ideas) dominated elite American economics departments “well into the late 1970s” (except, that is, for some departments like Chicago and Carnegie Mellon). [...]why does Ban hone in on the neo-Keynesian consensus here but suggest in Ruling Ideas that the “neoclassical-Keynesian synthesis” was in fact the “dominant postwar school of thought in the Euro-Atlantic area,” and that this synthesis rested on “neoclassical bedrock” (p. 21)?