Friday, October 8, 2021

The Passing Of Peter Flaschel And The Bielefeld School Of Macroeconomics

 German economist Peter Flaschel died yesterday at age 78.  I am not sure precisely of what, although it was not Covid-19.  He had been in declining health for some years, with a heart problem at least.  Roberto Veneziani, from whom I learned the news, said that Peter "sounded tire" when he spoke with him a few days ago.  Ironically he spoke with him to tell him I had accepted for publication in the Review of Behavioral Economics a paper they coauthored with two other economists on the economics of the pandemic. I knew and liked Peter a lot, although I had not seen him for a full decade, last when I spoke at Bielefeld University where he was located.  Indeed, his death I think means the end of what I had labeled "the Bielefeld School of Macroeconomics," although this did not catch on all that much. But I know that Peter, who may have been the central figure of this group, appreciated my labeling it as such and trying to bring some attention to them.

Indeed, I think they deserved more attention, which they got very little of in the US.  Various of them published quite a few books over the years, where their approach got laid out most fully.  But their articles did not show up in US journals, and to some extent I think they may have partly brought this obscurity on themselves.  In particular, while some like me saw them as having affinities with Post Keynesian economics, they themselves disdained the PKs for not being sufficiently mathematical. And, with a few exceptions, most of the Post Keynesians in their various sub-varieties and camps, seem to have ignored the Bielefelders, to the extent they were even aware of them.  Some of this may have also had to do with nations as well, with PKs mostly in US, UK, and Italy, although also in Australia, while the Bielefelders were heavily in Germany, with outposts in Japan, although some people at the New School in the US, and also in Australia.

So who else besides Peter was part of this group?  One was Reiner Franke, who was with Peter at Bielefeld for a long time, but then moved to Bremen.  Another was Willi Semmler, who long split his time between Bielefeld and the New School, not quite sure what his status is with all that.  But he was the main US link.  Then there was Toichiro Asada at Chuo University in Tokyo and the late Carl Chiarella of the University of Technology in Sydney, Australia.  I knew/know all of these.  Carl in particular, whose PhD was in Applied Math and served for awhile as coeditor of the highly mathematical Journal of Economic Dynamics and Control was one who was especially critical of what he considered the low mathematical content of much of Post Keynesian economics.  Peter himself had an undergrad degree in math, and also shared this view.  Just to note the Bielefeld connection, both Asada and Chiarella spent a lot of time visiting at Bielefeld and working with Peter on joint projects as well as with some of these others.

So what is the Bielefeld approach, and why do I respect it a lot?  Well, it combined Marx, Schumpeter, Keynes, Metzler, and Goodwin to generate fairly complicated models that combined both long-run growth dynamics with short-run cyclical fluctuation dynamics.  Their models easily produced various complex dynamics, including such things as chaotic dynamics, which I have long been interested in. They never went along with rational expectations or any of that stuff. I always thought their models were both realistic and intellectually sophisticated.  But as noted, they did not publish articles in some journals that might have gotten them more attention, especially the Post Keynesian ones that I think might have taken them. And books, well, it is easy to ignore books, no matter how good they are.  So I think their very appealing approach in my view just did not get the attention it deserved

And now it probably will not any further, as probably its key and central figure still at Bielefeld is no longer with us.  As it was in recent years he had become involved with some younger economists, especially Veneziani, who is at Queens College in London. Some of their work with various coauthors has in fact moved back more to a directly Marxist approach, with this very much the case for Peter's last book out in 2018 with Roberto and some others from Elgar, Value, Competition, and Exploitation: The Marxian Legacy Revisited.   Anyway, I shall miss him, a good man and a fine economist.

Barkley Rosser


Steve Keen said...

A nice tribute Barkley, and yes it's a loss. As you say, the greatest loss was the failure of Post Keynesians to learn from him and Carl Chiarella and the rest of that highly skilled team. That was a failure that had two sides: Carl and his group's disdain for the low mathematical abilities of PKs, and PKs disregarding their work for the opposite reason. I wonder how many in the PK community even know their names? said...


You are one of the people who does know about those guys. I thought Carl and some of them overdid their disdain for the math of PKs, as there were some, you included if you consider yourself a PK, who are/were plenty mathematical, me too as well I think. They accepted me, but somehow I guess they viewed me as not much of a PK, which is also the view of some PKs, :-).

Steve Keen said...

Partially it was that disdain for non-mathematical PK, but even there, it was nothing like the disdain I've experienced within the PK community itself--the classic "not invented here" syndrome, combined with some ridiculous personal jealousy. Carl & Peter just weren't particularly interested in anyone who wasn't using techniques that were of interest to them. "Not invented here"ism didn't come into it, and jealousy? Not an ounce of it.

I think this reflected their rather shy personalities (compared to extroverts like you and me!), but also their genuinely scientific orientation: you and me (me especially!) and most of the PK community are messianistic about reforming economics, ending the Neoclassical hegemony, etc. Carl's groups were just scientists doing research: happy to promote their fundamentally nonlinear, high-dimensional complex systems approach, willing to build on good ideas from others, but not really even conscious of building a community--or needing successors.

One example of the above was their twist to analysing debt-deflation in the early Naughties ("Price Flexibility and Debt Dynamics in a High Order AS-AD Model", etc.). One day I asked Carl why they had taken up the topic, and he answered "You inspired us"--meaning my work on Minsky in general, but specifically the paper I delivered (5 - The nonlinear economics of debt deflation, in the conference Commerce, Complexity and Evolution ( that I organised jointly with Carl, Bob Marks, and Hermann Schnabl.

This was classic Carl (and Peter--it was just easier for me to chat with Carl because we both then lived in Sydney). Total humility--imagine that comment coming from within the PK community! There are quite a few wonderful people there of course, like say Marc Lavoie, but others would downright resent that someone else came up with something that they wished they had invented).

But OTOH, there was no invitation to join their group and work on the idea, even after Carl's wonderful remark. It just didn't occur to them, because they were a bunch of scientists working on a given topic using their tools, and if someone else was working on the same topic with different tools, that was fine, but there was no need to combine forces.

Compare that to what has happened with Matheus Grasselli's collaboration with me on modelling financial instability. Matheus and I have worked together ever since, he's built a community of young scholars doing innovative work on Minsky models (which he insists on calling Keen models), ("An analysis of the Keen model for credit expansion, asset price bubbles and financial fragility",, and Matheus is taking the fight to Neoclassicals who think they have a monopoly on mathematical rigor.

In contrast to Carl and Peter, Matheus is an extrovert, and--having originally come into mathematical finance simply because he decided he wasn't going to be an unemployed quantum physicist--has become evangelical about the need to reform economics.

So disdain alone doesn't explain their lack of engagement overall with the PK community: it was mainly shyness, and the absence of a belief in the need to reform economics that characterizes the PK community in general.


Steve Keen said...

Let's not also forget that, though Carl was a full Professor (in the UK/Australian sense), undisputedly the best intellectual in UTS's economics department (if not the whole of UTS), and well-liked, the Neoclassicals there remained hostile to the idea of PK or any other school of thought--like most Neoclassicals they reject the very idea that there are schools of thought, there's just "good and bad economics" and PK, to them, falls into the "bad" camp. There was no way they could attach that moniker to Carl and Peter's work--it was intellectually beyond them--so Carl and Peter were tolerated and left alone at UTS. They even managed to hire some young researchers to build on aspects of their work--like Corrado Di Guilmi, who I think is still there.

But once Carl died, that was it: Neoclassical hostility became open, and the PK aspect of UTS's department was actively suppressed afterwards (LP Rochon's job interview there was a classic on that front). That made it hard for any sort of legacy to flow from Carl and Peter's work.

So Carl and Peter's work ends up being a "candle in the wind": a bright and unique contribution to economic thought, which died out when they died. This is a tragedy, but hopefully in the future their work can be rediscovered and revived.

One of my chief regrets here is that their simulation tool seems to have died with them. They did brilliant high-dimensional work with it, but I never even saw it in operation. They didn't promote its use by others, and I don't even know what it was written in--I'm guessing Matlab, but that's just a guess. OTOH I'm an evangelist for my Minsky software (, which is Open Source. It can do a lot of what they did, but there's much in their approach that would be difficult at present to build in Minsky.

Anyway, your tribute has inspired me to see if I can find out what they used to build their tool. It is probably documented in "The Dynamics of Keynesian Monetary Growth" ( and it's high time I took a good look at that book (fortunately it's available online, since I left my copy back in Amsterdam when I GTFO to avoid Covid last year) to see if I can glean some of their tools for use in Minsky. said...


You may be right that shyness was a factor in this.

Corrado and a couple of others Carl brought in to UTS are still there. But they are definitely not well supported any more, and I think are looking for alternatives, at least some of them.

I would note that for all his shyness and scientific orientation, Peter in particular was interested in reforming society. He did publicly advocate a number of specific policy proposals, such as the flexicare one, if I have that right, although there are many who do not like that approach, and I have some issues with it. But I think it fit in more with German attitudes.

I think he also was interested in having successors, and some of his younger more recent coauthers, such as Roberto Veneziani and Christian Proano might count. But I fear they are not enough or even internally coherent enough to constitute a continuation of the "Bielefeld School of Macroeconomics."

It was also the case that Peter was pleased with me coining that label, and had me do a couple book cover blurbs where I mentioned that. In many ways I think he was the center of that school, to the extent it did exist, and indeed his death is probably the death of it, as I argued.

All the best with your endeavors.

Steve Keen said...

I agree mate. I'll see if I can salvage something from the graveyard though, when time permits.

All the best to you too.

Steve Bannister said...

Very interesting thread, thanks for documenting this history.