Keynes for the Twenty-first Century

2010

This paper argues that the thinking of John Maynard Keynes remains highly relevant to an understanding of the financial collapse of 2007-8 and for policy measures to enable the world to escape from the 'great recession'. The essay explains the role of uncertainty in Keynes's theory, and the Keynesian case for fiscal and monetary 'stimulus'. It provides a Keynesian perspective on the reform of the world's monetary system, and concludes with reflections on the role of the state and the state of economics.

2006

The History of Economic Thought

I Introduction and Methodology P A Samuelson just before his death reaffirms his adherence to an old-style Keynesian when he states: The Keynesian idea is once again accepted that fiscal policy and deficit spending has a major role to play in guiding a market economy I wish Friedman were still alive so he could witness how his extremism led to the defeat of his own ideas Samuelson 2009 42 It is an apt time to contemplate his statement in the year of 80th anniversary of the General Theory This is a review article on recent studies on Keynes in the light of the history of economic thought Owing to restrictions of time and space I hold the following four general principles of compiling a bibliography: i I confined my research to books and articles in English and in Japanese as exceptional cases which were published after the financial crisis of 2007/8 Nevertheless I included some literature published before 2006 for these have been a standard of reference for subsequent research; ii After selecting 14 academic journals the abbreviations are presented below in which papers on the history of economic thought often appear I checked all the titles and subtitles published between approximately 2009 and 2016 which included Keynes A point to be noted here is that the access word was not Keynesian ; iii I searched articles in journals other than the above 14 ones by way of two search engines in the website of oligopolistic journal publishers: Wiley

Panoeconomicus

This article outlines principles of a modernised macroeconomic framework, drawing on John Maynard Keynes. It explores the historical context in which Keynes? economic theory arose, and the history of its application and subsequent replacement by neoclassical economics. The article argues that any updated Keynesian programme must address three new problems: globalization, wealth inequality and climate change. It sketches out the ways in which these might be addressed.

This paper is about his 'assault' stategy, its comportment relative to common views of what Keynes was trying to do, and its logical possibilites of success. Since Keynes was arguing against the then predominant Marshallian neoclassical method of economic analysis, we will have to also give some time to considering the essentials of Marshall's methods in order to determine where Keynes' might have thought he was placing the most telling blows

RePEc: Research Papers in Economics, 2019

The recently published Elgar Companion to John Maynard Keynes (2019) is a major new contribution to Keynes scholarship, with 63 participants contributing 95 distinct entries, in 632 pages of text proper. This review essay provides an overview and assessment of the character and content of the work. It does so also via consideration of the question of Keynes's key theoretical achievements; the relation between Keynes's thought and the main currents of subsequent Keynesian economics; Keynes's approach to policy visa -vis 'Keynesian' policy; and finally, the question as to what is of enduring validity and greatest importance in Keynes's economics, for the future.

2023

Conclusion '"If it benefits all the people to confiscate your father's money then ought it not to be confiscated?" "But will it really benefit them?" "He's hopeless!' Billy roared. "Read Keynes, read Lenin, read Marx!"'-Gore Vidal, Washington D.C. (1967) Keynesianism was unpopular among the very people it was supposedly designed to benefit the most. Viewed chronologically, it can be seen that the assumption of popular will for the new economics was itself imposed from above but retrospectively. This thesis shows that Keynesianism was divisive, inflammatory and largely unwanted. Keynesianism was adopted in Australia because it reflected an international realignment of capital as well as a desire to assuage the populace. Capital faced no greater threat in Australia than the revolutionary and reformist spirits of the 1940s, both of which took many years to exorcise. Undeniably, amelioration was beneficial to Australian society. By making employment relatively secure, enabling the expectation that one could live in a home with modern conveniences and raise a family, all while accruing wealth, the objective of improving the living standards of the masses was broadly satisfied. The consensus historical view is, rightly, ambivalent because of the hardship of notable groups within and without Australian society. To celebrate Keynesianism is to overlook, dismiss or conceal the price paid by less powerful peoples. A similar argument can be made with neoliberalism, which vastly expanded the wealth of those born before the 1970s and setup a generational division based on economics and Conclusion 2 reinforced with politics and culture that, so we are led to believe, time will resolve but only after it is too late for those born after 1970 or yet to be born. 1 Keynes was writing in a context in which states, economists and powerful vested interests were receptive to his ideas. However, the crisis of war and the fear among the political right wing of society and capital about what the end of the war would bring, meant the new economics was an obvious alternative to the status quo. The lesson of the previous major war, post-bellum period and depression era had finally been learned. If there were to be conflict-remembering that class conflict is absolutely essential-then it had to be redirected to smaller groups within and larger groups without. For capitalism to survive it had to ameliorate to the minimum level at which the threat of revolutionary unrest was quashed while still preserving profitability. For the left and labour, Keynesian economics represented another attempt to ward off either socialism or a non-capitalist (and non-communist) third way. The latter option, popular among moderates, was an important factor in the "Keynesian revolution" as was the capitulation of the far left in favour of maximising amelioration when it became clear that a radical reconstruction was unachievable. E. P. Thompson famously wrote in the preface of the Making of the English Working Class (1963) that he sought to save the forgotten masses in history from the 'enormous condescension of posterity'. 2 It is easy for historians to cast judgment on unremarkable humans when vested with the morality (and complexity) of the present. As Emma Griffin explains, Thompson was demonstrating the importance of apparently insignificant people. 3 That Keynes was élitist and

The South African Journal of Economics, 1983

Impact on Monetary Theory, covers more ground than its title suggests. It is a masterly survey and commentary on most of the major developments in macro and monetary theory from Keynes's time to the present. Professor Gilbert has provided the perfect antidote to `textbook' macroeconomics. After reading it nobody could come away with the idea that economics is a settled body of conclusions ready to be applied rather like the recipes in a cook book. It should be required reading in all advanced courses in macro and monetary economics. Professional economists will find its extensive bibliography invaluable. The only omission of note is the New Classical or Rational Expectations School. This is unfortunate, for Professor Gilbert's capacity to convey the essence of large bodies of literature in one paragraph would be particularly welcome here. In an economic model the expectations of economic agents are said to be rational if the economic agents use the same model for forming their expectations as the economist who is trying to explain the workings of the economy. Usually rational expectations are associated with continuous market clearing and full employment, although this is not always so. It would seem that rational expectations represent a return to the very views which Keynes was attacking. However, what about expectations? One criticism of much of the Keynesian (as opposed to Keynes himself) literature is that it neglects expectations. According to Keynes the behaviour of economic agents depends not on the actual but on the expected values of economic variables. Rational expectations theory also assumes that the behaviour of economic agents depends on the expectations of economic agents. Perhaps here we have common ground between Keynes and the Rational Expectations School. However this apparent similarity with regard to expectations is misleading. Keynes's approach to expectations is fundamentally different. In rational expectations models the expectations at any point in time can be obtained from the reduced form equations of the model. These expectations 1983 SAJE v51(3) p447 depend on the exogenous and predetermined variables of the model, and a random error term. In short, expectations are a random variable with known probability distribution. In rational expectations models economic agents are subject to risk; in Keynes, economic agents are subject to uncertainty. According to Keynes the economic agents do not know the probability distributions of the variables on which they must base their decisions. Keynes writes, `By "uncertain" knowledge, let me explain, I do not merely mean to distinguish what is known for certain and what is only probable. The game of roulette is not subject, in this sense, to uncertainty; nor is the prospect of a Victory Bond being drawn. .. The sense in which I am using the term is that in which the prospect of a European war is uncertain, or the price of copper and the rate of interest twenty years hence, or the obsolescence of new invention, or the position of private wealth owners in the social system in 1970'(Keynes, 1937, pp. 210-11).Despite the extreme precariousness of our knowledge the necessity for action compels us to make decisions. Keynes then goes on to say how in practice we make decisions despite the paucity of our knowledge of the future. Thus the Rational Expectations School make radically different assumptions from those of Keynes about the knowledge economic agents have of the future. Professor Gilbert's book is divided into four parts, each subdivided into a number of sections. Part 1 consists of three sections: 1. Keynes the man, 2. A Survey of the Literature and 3. The Keynesian Revolution. Professor Gilbert deals with his subject by quoting liberally from the original sources whilst adding his own comments. His method gives the reader ample opportunity to formulate his own opinions. Furthermore, he takes great pains to present the views of those he writes about accurately, even where he is clearly in disagreement. 'Keynes the man' is a brief discussion of Keynes's personality as seen by Keynes's friends and contemporaries. No doubt our understanding of Keynes's complex personality will be transformed by Professor Skidelsky's forthcoming biography of Keynes. (Skidels ky, 1983). Unfortunately Professor Gilbert provides little discussion of Keynes's method of working or his habits of thought. Keynes emphasized the importance of judgement and intuition. Economics was to Keynes as to Marshall before him not a settled body of conclusions but a method of thought and analysis. In two letters written to Harrod during 1938Keynes reveals his views on the nature of economics: It seems to me that economics is a branch of logic, a way of thinking; and that you do not repel sufficiently firmly attempts. .. to

Florya Chronicles of Political Economy, 2020

This paper investigates the major tools of the orthodox Keynesian approach and the critical discussion for that approach based on mainstream assumptions covering both classical dichotomy and the neoclassical thoughts. While the study reveals the difference of orthodox Keynesian arguments from the others in the presence of the importance of uncertainty and expectations, the counter-arguments are formed by way of examining three different assumptions: (i) the Lucas critique, (ii) the new Keynesian approach and the small menu cost theory, and (iii) the heterodox reflections. Moreover, it briefly explains the core elements of Keynesian investment theory concerning the components of financial markets. However, both of these factors also consider some major contradictory factors to reveal the difference of orthodox Keynesian assumptions from the mainstream theoretical agenda of the neoclassical approach.

Economic Record, 2012

The Great Financial Crisis led to a revival of interest in ‘Keynesian’ economic policy, understood as temporary, debt-financed fiscal activism in response to a short-run, albeit particularly deep, macroeconomic contraction. But Keynes’s theory led him to diagnose involuntary unemployment as a long-run problem, and one for which competition (via wage and price flexibility) was not a solution. Consequently, his policy proposals were more far-reaching than short-run fiscal activism. The final chapter of The General Theory provides the appropriate point of departure for reflecting on the difference between Keynes’s policy position and what later came to be regarded as Keynesian policy.