2 Towards a ‘New Economics’: Values, Resources, Money, Markets, Growth and Policy Terry Barker University of Cambridge Abstract ‘New economics’, as outlined in this chapter, is developed from the Post Keynesian approach to macroeconomics to allow for intrinsic values, institutional change and diverse consumers and producers. The chapter presents a self-evident set of assumptions on which to base the theory and then develops an analysis of demand-driven markets within a historical process of globalisation. The asymmetry between consump- tion and production is emphasised, with production being concentrated and preceding consumption, but consumption being more general- ised and causing production. A theory of economic growth through endogenous technological change and increasing trade is presented. Fiscal policies and regulation, with incomes policies, are required to manage the system to achieve full employment, with monetary policies accommodating demand for money. The chapter concludes with a dis- cussion of the quantitative modelling at the global level to represent the economic system in accordance with the theory. Keywords: New Economics; Post Keynesian economics; endogenous technological change; demand-led growth JEL Classifications: A13, B52, E02 1 Introduction 1 The climate and financial crises have shown the inadequacies of tra- ditional thinking in economics and encouraged new approaches to understanding economic behaviour. New thinking in economics is an 39 P. Arestis et al. (eds.), New Economics as Mainstream Economics © Palgrave Macmillan, a division of Macmillan Publishers Limited 2011