Questioning the Bernanke-Blanchard model in the Eurozone: Illustration of the Spanish case

Abstract

This is a critical review on mainstream Macroeconomics, questioning its modeling that is far from reality, artificial and inducing current crises. It is paid attention on the latest model of prominent macroeconomists, Bernanke and Blanchard, who seek to explain the COVID-19 crisis, without relating it to the preceding crisis, such as the Great Recession and its false management based on credit expansions without voluntary savings and with unconventional measures from the Central Banks. The model of the aforementioned authors is analyzed, offering its application to the Spanish case and in comparison with other economies in the Eurozone. The review is completed with a critical corollary of the heterodox synthesis, offering the divergent vision and foundations of the Austrian Economics and the New-Institutional Approaches from the New Political Economy, which in turn allows us to diagnose the current Macroeconomics and its crisis.