In the 1970s, stagflation—a dispiriting mix of slow growth, inflation, and high unemployment—forced economists to question the prevailing model of the macroeconomy, the Keynesian model, which focused on stimulating demand (for workers, for consumer goods, and so on) through government spending.
The result was new Keynesian economics, or, broadly speaking, the attempt to apply microeconomic principles to macroeconomic models. New Keynesianism was, so the story goes, a US-led effort, featuring distinguished American economists such as Gregory Mankiw and Joseph Stiglitz.
“But,” interjects Josh Banerjee, a 2023–24 HOPE Center Visiting Scholar, “what if I tell you that this is instead a British story, involving a British economist who, despite winning a Nobel Prize, is generally overlooked in the new Keynesian movement?”
Enter James Meade, the Cambridge and LSE economist who was awarded a Nobel Prize in 1977 for his work on international trade and international capital movements. Yet right around the time Meade won the Nobel Prize, at age seventy, he was already well into a new and energetic phase of his career: formulating his own new Keynesian model in response to the worldwide economic malaise.
“This period of Meade’s career is very much under the radar,” Josh says. “And Meade might have gotten there first.”
Meade’s new Keynesian period is the main focus of Josh’s current writing and research, a period that saw Meade undergo a crisis of confidence in the Keynesian model and produced for him his own Damascus moment.
Meade’s new Keynesian vision differed in important ways from the American one, says Josh, who completed his PhD in 2023 at LSE with a dissertation on postwar British macroeconomic history. Meade, for instance, assigned a larger role to fiscal policy and exchange rates, as well as favoring a specific price level rather than the standard inflation target of 2 to 3 percent.
“Meade spent the last twenty years of his life pursuing and passionately arguing for his new Keynesian vision, when he could have easily put his feet up and rested on his laurels. On a personal level, I admire that tremendously. That’s a big part of the appeal Meade has for me.”
An economic historian by training, Josh enjoys a good counterfactual project, imagining the direction macroeconomics might have taken had it followed Meade and not the Mankiws and Stiglitzes of the world.
Josh, who was born and raised in the north of England, in Leeds, says that in some ways Meade was arguably a victim of his own success with his earlier work on international macroeconomics. “Meade’s ideas and approaches were quickly assimilated by the economics profession and organizations like the IMF, thus becoming hidden in plain sight.”
Meade, though, is not the only economist with ties to LSE who has captivated Josh’s imagination. Josh hopes to write an intellectual biography of another Nobel Prize winner, the Canadian economist Robert Mundell.
A big part of the fun of working on Mundell—“undoubtedly one of the truly great postwar economists,” Josh says—is that he’s so unpredictable.
“Mundell argued from wherever his intellectual interests happened to be at the moment rather than from any preestablished view. So depending on which point in his career you look at, his economic and political views don’t always align in the way we might expect.”
Josh, who in 2024 will also be a research fellow at the Mercatus Center at George Mason, came to the history of economics in an effort to more fully understand the economic history of his native UK.
“Who exactly were the men and women behind the economic policies I had written about in my doctoral work? What were the forces driving them? What context did they operate in?”
Josh will continue at Duke and begin his academic engagement with Mercatus in 2024, as he looks forward to the next stage of his career.