Which are the lessons in the 8 papers presented today at this symposium?

1. The future of the global economy:A symposium on the financial crisis and itsconsequences for growth and prosperitySummaryLars Jonung, Lund

2. My approach: Will the crisis of today (the Great Recession) be like the crisis of the 1930s (the Great Depression)?New theories and new policies?A defining moment?

3. The Great Depression of the 1930s Major impact on economic activity – thus on:1. Economics as a science(macroeconomics – Erik Lindahl)(Keynes – the Stockholm School - the Austrians)2. Economic policies – thus on institutions for framingeconomicpolicies3. Society at large(Hitler, WW II - ”big” government, New Deal, keynesianism, the welfarestate)

4. Will it be like the 1930s?A crisis for the economics profession currently1. Whydid you not warnus? (the Queen’squestion)2. What is wrong with prevailingeconomictheories?(the dark age ofmacroeconomics - Paul Krugman)3. Who is to blame for the crisis? ( At least 38 suspects – includingmainstreammacroeconomics and finance)

5. An Agenda for Reforming Economic Theory Joseph E. StiglitzEconomics is in a sorry state of affairs. Most of the economics profession failed to predict the most important economic event to occur in the history of modern “scientific” economics. If economics is a science, it is presumably to be judged by its ability to predict. It has, by and large, failed that test. Worse still, the standard paradigm gave rise to a set of policy prescriptions that also have failed miserably.

6. Will it be like the 1930s?The answerdepends on the lessonswearrive at concerning:1. The causes of the currentcrisis2. The consequences of the crisis3. The cures of the crisis

7. Which are the lessons in the 8 paperspresentedtoday at this symposium?

8. The Great Recession of 2007-2011Will it (should it) be like the Great Depression of1930s (new theories and new policies)?Robert Barro No, cutspending and governmentRoger Backhouse Yes, if a broaderchange in societyKatarina JuseliusYes, weshouldchangeeconomicsBengt-Åke Lundvall Yes, a new New Deal, inequality, ChinaRobert Boyer Yes, ”relevant” macroeconomicsLuis BertolaYes, Latin America, democracyLars Calmfors Yes, Europe, betterfiscaldiscipline, listSeppo Honkapohja The Nordics, learning the lessons (central banker) from the crisisof the 1990s

11. CrisesofGovernments: The ongoingfinancialcrisis/recession Robert Barroon the US: The problem: Toobiggovernment – fiscal stimulus ”a wasteofmoney” The solution: Tax cuts, smallergovernment, betterincentives Outside US perspective: 1. A balancesheet recession - socialize private losses , the N-word (Nordic lesson: save the banks – not the shareholders) 2. US taxesarelow, the only OECD-country without a VAT 3. The US medical system a heavyburden - 18 % of GDP in the US vs 9 % in Sweden Bottom line: Dysfunctional US political system

12. Barro WSJ 23 August 2011:And there is zeroevidence that deficit-financed transfers raise GDP and employment—not to mentionevidence for a multiplier of two.

13. October 1, 2009, 3:33 pm Multiplyingmultipliers Mark Thoma, MenzieChinn, and The Economist all have posts on the question of the size of the fiscalmultiplier. Mark already provides links to my variouscommentaries on Barro. Butletmerepeat the gist. Barro makes a great deal of the fact that private spending fellduring World War II, ratherthanrising the way it should in a classicalKeynesian (oxymoron?) story.

14. Will it be like the 1930s?Answer 1: TooearlytotellThe new GT willarrive in 2013-14

15. Will it be like the 1930s?Answer 2: This symposium? Mixed answersThe global policy response has so far builtupon the lessons from the 1930s

16. The policy lessons from the 1930s:1. Expansionarymonetary and fiscalpolicies – save the fin. system2. No restrictions on trade3. No restrictions on capitalflows4. International economiccooperation – OECD, G20, EU

17. Missing from the 1930s:- the euro crisis- the dollar crisis- IMF - global imbalances- financialeconomics in crisis

18. The Great Recession 2007-2009A learning process is going on. Welearn that the lessons of pastcrisesmay not be the correctonesFiscal policy a major problem(Barro, Calmfors)Financialstability a major issue(Boyer, Lundvall, Calmfors)

19. Figure 1. The policy learning process. A stylized picture.

20. Social learning – not private

21. To sumupthis symposium:ifwepay proper attention to research on economicpolicieswemay face a betterfuture- not a crisis-freefuture- butwewill be wiserwhenwe face the nextcrisis

22. Where is Pufendorf in this symposium?C M Bellman:A young student at Uppsala around 1770:Fredmans epistel sång 28: ”Med en vredgad min han tog bådPufendorf och Grotiusoch dem bus i väggen slog …”Q: Shouldwe do thiswith mainstream macroeconomicstextbookstoday?A: Not yet …

23. The future of the global economy:A symposium on the financial crisis and itsconsequences for growth and prosperitySummaryLars Jonung, Lund

24. Responding to economic crisis:macroeconomic revolutions in the 1930s and 1970s Roger Backhouse, Birmingham

25. Challenges for macroeconomictheory Katarina Juselius, Copenhagen

26. The crisis and the changing global knowledgelandscape Bengt ÅkeLundvall, Aalborg

27. Latin America in the crisis Luis Bertola, Montevideo

28. Economic Policy and the Fiscal Crises Lars Calmfors, Stockholm

29. The Nordics in the 1990s and today’s crises:resilience after adjustment SeppoHonkapohja, Helsinki

30. Bristen på internationellt samarbete under 1930-talet

31. Figure 1. The policy learning process. A stylized picture.