SchoolsMacroConceptsSchoolsPolicyModels
Macroeconomic school

Post-Keynesian

Post-Keynesian economics centers demand, institutions, endogenous money, uncertainty, and financial instability.

Heterodox branch

School thesis

Post-Keynesian macro treats the economy as a monetary production system. Demand, bank credit, uncertainty, and balance sheets sit inside the mechanism.

Post-Keynesian economics keeps the parts of Keynes that later synthesis often softened: fundamental uncertainty, effective demand, and the monetary production economy.

Banks create money inside the economy, so finance becomes part of real exchange rather than a neutral wrapper. Instability and path dependence become normal possibilities rather than rare exceptions.

Use when

The binding channel is visible

Effective demand, fundamental uncertainty, bank money creation, balance sheets, and institutions. The economy is read as a monetary production system where spending decisions can be postponed and finance can amplify the cycle.

Evidence burden

Show timing and measurement

Central-bank operating frameworks and bank balance-sheet data support the claim that commercial bank lending creates deposits inside the economy.

Rival check

Name the stronger alternative

Episodes where private demand returns quickly without public support or financial restructuring after a large shock.

Mechanism chain

From claim to policy rule

Claim

Binding constraint

Money is endogenous, uncertainty is fundamental, and equilibrium is the exception.

Mechanism

Transmission

Effective demand, endogenous money, and institutional structures shape output and employment through paths with persistent instability.

Policy read

Policy implication

Use fiscal policy, financial regulation, and institutional design to support demand and reduce instability rather than waiting for self-correction.

Mechanism

Required conditions

The claim needs each step in the data; a missing link weakens the whole interpretation.

Money

Loans create deposits

Commercial banks create deposit money when they lend. Deposits matter for settlement and funding after the loan is booked.

Uncertainty

Investment can freeze

Under fundamental uncertainty, firms and households can postpone spending in ways that no price change quickly fixes.

Finance

Stability can breed fragility

Long expansions can move balance sheets from hedge finance toward speculative and Ponzi finance.

Reads the economy through

effective demand / endogenous money / uncertainty / institutions

Lineage

Lineage and inheritance

Historical moves show which problem the tradition was built to solve and which claim it keeps defending.

Keynes and Kalecki

Demand and distribution

Post-Keynesian work keeps effective demand and class/distributional conflict close to the center.

Minsky

Financial instability

Credit structures evolve during booms, so crisis is endogenous rather than a purely external shock.

Modern SFC

Accounting consistency

Stock-flow consistent models force every asset, liability, income flow, and spending flow to add up.