Black Swans, Lame Ducks, and the mystery of IPE's missing macroeconomy. Issue 2 (4th March 2017)

• Record Type: Journal Article
• Authors: Blyth, Mark; Matthijs, Matthias
• Is Part Of: Review of international political economy. Volume 24:Issue 2(2017)
• Page Start: 203
• Page End: 231
• Publication Date: 2017-03-04
• Subjects: Brexit -- IPE theory -- Goodhart -- Kalecki -- Keynes -- macroeconomics -- neoliberalism -- neo-nationalism -- populism -- Trump; International economic relations -- Periodicals; International finance -- Periodicals; International relations -- Periodicals; 330.9
• DOI: 10.1080/09692290.2017.1308417
• Languages: English
• ISSNs: 0969-2290

Abstract

ABSTRACT: Britain's BREXIT vote and Trump's victory in the US presidential elections sent shockwaves through the Western liberal establishment, including academia. Both events suggest yet another 'rethinking' of International Political Economy (IPE). Yet we have been here before. After the global financial crisis of 2008, 'Open Economy Politics' (OEP) was criticized for being unable to either anticipate or adequately explain the global financial crisis. Now that IPE has been caught short twice in a decade, any rethinking must go beyond critique and beyond OEP. To stop being surprised, we argue that IPE needs to shift its focus from micro-foundations back to macro-effects. IPE today strangely lacks an appreciation for the global macroeconomics that drives the outcomes it has such difficulty explaining, such as recurring financial bubbles, increasing levels of inequality, and the global rise of populism. Bringing the global macroeconomy back into the IPE, we argue, is a necessary corrective.