(Dis)equilibrium, uncertainty and monetary analysis: an essential discussion contemporary economics

The aim of this paper is to highlight the importance of developing new perspectives in economics by reference to theoretical approaches that have been somewhat neglected in the past. In the aftermath of the financial and economic crisis, insightful ideas need to be developed so to positively affect policy. The discussion centres on one of the pillars in economic theory, namely the concept of equilibrium. With reference to the literature, it is acknowledged that several definitions of this concept are available. Their relevance is considered for both theory and economic policy. Specifically, the paper refers to schools of thought such as Post Keynesian economics (PK) and the Monetary Circuit Approach (MCA) – which stress the economic significance of money. Their arguments challenge “conventional” views on a competitive equilibrium in free markets as advocated by mainstream economists (also referred to as “orthodox”, “classical” or “neoclassical” economics by the scientific literature).