Steve Waldman is tired of seeing economists spend their time debating differences rather than emphasizing commonalities. “When I think about these three groups, I don’t think, Highlander-style, ‘There can be only one!’ I think ‘Cool! Let’s put these ideas together.’” Here’s his recommendation:
One nice thing about a monetarist / saltwater / post-Keynesian synthesis, the thing that has me most excited, is that it would be perfectly possible to give our nouveau central bank a mandate that explicitly includes restraint of private-sector leverage in addition to an NGDP target. I think that the post-Keynesians are right to identify financial fragility as a first-order macro concern. On its own, NGDP path targeting would help “mop up” after financial fragility and collapse, because it weds depressions to inflations, engineering wealth transfers from creditors to debtors when things go wrong. But we’d rather avoid the whole cycle of fragility, insolvency, and inflation, if we can.