Mainstream macroeconomics is founded on the idea of perfectly rational representative agents. Yet there is a growing realization that economic theories based on such agents are inadequate guides to real-world decision making. The behavioural evidence has had significant impacts on microeconomics but the same cannot be said of macroeconomics. This book is part of the movement to do for macroeconomics what behavioural thinking has done for microeconomics. Using behavioural evidence and insights from Keynesian and institutionalist traditions, it presents an empirically grounded alternative to the paradigm that currently dominates macroeconomic theory. It highlights how dynamic interactions across markets can generate instability, endogenous cycles and secular stagnation. It fully engages with macroeconomic theory, provides a multi-faceted view that explains how and why it is time to rethink its foundations and offers a path forward.

‘From work on the ‘power bias’ embodied in technological change to debates about the role of ‘conflict inflation’ in the post-pandemic environment, macroeconomists are (re)discovering ideas that have been central to Peter Skott’s research and teaching for decades. In this rigorous alternative to traditional DSGE-based textbooks, Skott offers advanced students and practitioners a sensible alternative macroeconomics, one that draws on both older traditions and his own influential research. It is an extraordinary achievement, with craft and erudition evident on every page.

Peter Hans Matthews - Middlebury College

‘Structuralist and Behavioral Macroeconomics begins – as well it might – with a critique of the intertwined methodological shibboleths of modern macroeconomics: the omniscient representative agent and the ‘solution’ to the Lucas critique. What follows is a soup-to-nuts reconstruction of macroeconomic thinking that covers the familiar (Phillips curves, growth and cycles), the novel (power-biased technological change), and all points in between. Eschewing labels in favor of straightforward emphasis on good ideas, this book is a tour-de-force from one of the sharpest minds in contemporary macroeconomics.’

Mark Setterfield - New School for Social Research