November, 2016

Political Economy and the Supply of Macro Guidance

  • Richard Wagner

    Distinguished Senior Fellow, F. A. Hayek Program for Advanced Study in Philosophy, Politics and Economics
  • Giuseppe Eusepi

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Find the full working paper at SSRN.

This is the second of a six chapters of the penultimate draft of a book titled Public Debt: An Illusion of Democratic Political Economy. This essay explores just who it is that supplies the macro guidance that is envisioned in the various macro theories. The answer to this question is of great significance for the political economy of public debt and fiscal policy. Where the two extreme points of answer regarding this question are some macro czar as an analytical convenience and “the people” as a democratic platitude, this essay takes a Machiavellian-inspired tack whereby the few dominate the many.