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What If Everything We Know About Economic Policy is Wrong?

27 Pages Posted: 15 May 2011 Last revised: 20 Oct 2015

Dan Ciuriak

Ciuriak Consulting Inc.; C.D. Howe Institute; Centre for International Governance Innovation (CIGI); BKP Development Research & Consulting GmbH

John M. Curtis

Centre for International Governance Innovation (CIGI)

Date Written: April 1, 2011

Abstract

Like other sciences, economics shows long periods of gradual refinement of theory and the steady accretion of empirical evidence, punctuated by the occasional sea change in world views. Thus the history of economic thought and practice reveals distinctive eras characterized by differences in what was considered conventional wisdom by informed lay persons and policy practitioners, differences in institutional frameworks, and differences in the preoccupations of the leading theoreticians. An example of such a change came in the pivotal decade of the 1970s from the Bretton Woods era package of Keynesian demand management, fiscal policy pre-eminence, fixed exchange rates, and New Deal welfare economics to the neoliberal combination of supply-side public policy, monetary policy pre-eminence, floating exchange rates and an emphasis on market disciplines and incentives that has dominated since. This paper argues that a similar confluence of pressures, contradictions and policy impotence that accompanied the paradigm shift of the 1970s is in evidence today. This argues for a fundamental re-appraisal of what is presently considered conventional wisdom — i.e., of what we “know” about economic policy today.

Keywords: paradigm shift, globalization, economic governance

JEL Classification: B50, F01, F02

Suggested Citation

Ciuriak, Dan and Curtis, John M., What If Everything We Know About Economic Policy is Wrong? (April 1, 2011). Available at SSRN: https://ssrn.com/abstract=1839647 or http://dx.doi.org/10.2139/ssrn.1839647

Dan Ciuriak (Contact Author)

Ciuriak Consulting Inc. ( email )

83 Stewart St.
Ottawa, Ontario K1N 6H9
Canada

C.D. Howe Institute ( email )

67 Yonge St., Suite 300
Toronto, Ontario M5E 1J8
Canada

Centre for International Governance Innovation (CIGI) ( email )

57 Erb Street West
Waterloo, Ontario N2L 6C2
Canada

BKP Development Research & Consulting GmbH ( email )

Romanstrasse 74
München, 80639
Germany

John M. Curtis

Centre for International Governance Innovation (CIGI) ( email )

57 Erb St. West
Waterloo, Ontario N2L 6C2
Canada

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