Heterodox macro after the crisis

Macroeconomics is in crisis and this creates openings for alternative perspectives. The dominant heterodox traditions, however, have shortcomings that need to be addressed, both to improve our understanding of the real world and to take advantage of the opportunities offered by the irrelevance of most mainstream macro. This paper discusses three examples of areas that need attention: (ⅰ) investment functions (where popular specifiations lack behavioral and empirical support), (ⅱ) income distribution (where key developments have received little attention) and (ⅲ) the relation between income inequality and fi ancial markets (where extensions of existing models may help explain fiancial instability).