Bringing together the horizontalist and the structuralist analyses of endogenous money

Abstract

In the introductory chapter of this book, Philip Arestis maintains that throughout the course of his academic career Malcolm Sawyer has adopted an ‘open-minded’ approach to economics, which had led him first to revive and then make ground-breaking contributions to Kaleckian economics from the 1970s onwards. This chapter supports this view. In his early academic career Malcolm published important empirical papers on the nature of modern capitalist economies (see, for instance, Aaronovitch and Sawyer, 1975a, 1975b; Henry et al., 1976; and Sawyer, 1971, 1976, 1979). This empirical work soon led him to question the dominant macroeconomics theories of the time, namely the IS-LM Keynesian theory (hereafter Keynesian theory) and the monetarist theory (Sawyer, 1982). In his view, for all their differences Keynesian and monetarist theories committed the same sin. Keynesian and monetarist theories were based on ad hoc hypotheses, with very little empirical support.