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Paper 114: Political interpretative flexibility and the economics of inflation and unemployment

Neil Stephens

Macroeconomics is political. The very variables used in macroeconomic models – unemployment, inflation, interest rates – are frequently heard in political debate. The work of macroeconomists underlies these discussions as it mingles in contested political narratives. In this paper I present the findings of a research project studying macroeconomists working on the relationship between unemployment and inflation between the 1960s and early 1980s. Central to the paper is the macroeconomists own political beliefs and how they shape their economic modelling. A minority saw no relationship between their macroeconomic work and their political beliefs. Yet many others did identify exactly that; often seeing their academic work as a political activity. The fascination here is in the contingency of these connections; how each individual negotiates the complexity and ambiguity of the political connotations of their own work. I develop the concept of Political Interpretative Flexibility to aid our understanding of how macroeconomists can (a) espouse similar theories yet inscribe radically different political connotations, and (b) promote similar political agendas through radically different economic theories.

Working Paper 114: Political interpretative flexibility and the economics of inflation and unemployment, Cardiff School of Social Sciences, (2008), ISBN 978-1-904815-75-4