Recognition that economic development involves structural transformation and continuing disequilibrium clearly calls into question the relevance of the neoclassical theory of economic growth – in both its old and new versions –, which is the perspective that most macroeconomists grew up with. The tension here would seem to indicate that conversation with economists who have been studying the growth process from an evolutionary, Schumpeterian and structuralist perspective would be as valuable for macroeconomists as interaction with Keynesian macroeconomists would be for the former.
One of the arenas where such a conversation would seem particularly needed is about the mechanisms and institutions that provide the finance needed for economic transformation. This obviously is an extremely important topic in its own right, and neither group of economists have been studying it effectively. Long ago Schumpeter highlighted the central role of finance in allowing an economy to change what it was doing, but modern industrial economists who purport to be Schumpeterians have done little research on finance and industrial dynamics. Macroeconomists who increasingly are recognizing that economic development involves structural transformation none-the-less largely continue to work with a theory of finance that is tuned to macroeconomic variables, and not to an economy of many sectors and firms whose relative importance is changing over time.
There certainly is a broad “macro” financial environment that is operative in an economy at any time, and various policies will affect this environment in different ways. The central bank can tighten of loosen credit in a way that virtually all economic actors will feel. But different sectors will be affected in different ways, and even within a sector different kinds of firms (for example indigenous firms versus branches of multinationals) may feel the effect differently. But since hardly any of the analysis of the effects of monetary tightening or loosening has looked at the economy as an evolving system, we know very little about how these kinds of policies influence the pace and pattern of economic transformation.
Very similar things can be said about the effect of the exchange rate on economic development, an issue that figures out at the center of structuralist development thinking, with its recent obsession on how competitive exchange rate regimes promote new tradable sectors, and overvalued exchange rates generated by high commodity prices or excessive capital inflows block the structural transformation toward good and services with increasing technological contents.
Similar things can be said regarding the effects of tight or loose labor markets, and the effects of different labor market and social protection regimes.
There is, therefore, a lot for micro and macro economists to talk about. And a very exciting research agenda that might come out of those conversations.