The "New" Neoclassical International Political Economy of Macroprudential Regulation and Capital Controls: "Style" over "Substance"

A "new" neoclassical international political economy (NNIPE) emerged from the 2008 financial crisis showing how macroprudential regulation and capital controls (MPR-CC) can eliminate the systemic risk behind endogenous financial cycles. An implication of this is that decentralized capitalism is inherently financially unstable, which appears to make inroads with heterodox traditions. However, this paper demonstrates that NNIPE represents a superficial, rhetorical appearance of theoretical improvement, as represented in its "style," while the "substance" of its underlying assumptions and mechanisms remain mired in neoclassicism. Moreover, it grew out of ideologically-motivated ideational change at the International Monetary Fund.