Information about Post Keynesian Economics
Post Keynesian economics[1] is a school of thought which is based on the ideas of John Maynard Keynes. It differs from the interpretation of Keynes' ideas offered by mainstream Keynesian economics, such as the new Keynesian economics, emphasising in particular:
"Logical time" is the type of "time" regarded in most models in neoclassical economics, i.e., comparative statics exercises in which an equilibrium is disturbed and the model automatically moves to a new, predetermined, equilibrium with no attention given to the process of getting there. In difference to this, Post Keynesians consider "historical time": the present is nothing but a moment in the passage from the immutable past to the unknowable future (to paraphrase Joan Robinson). Economy is always a dynamic process and (almost) never in an equilibrium state. The actual process of going from situation A to situation B is path dependent, helping to determine the character of situation B rather than it being predetermined. Thus, the Post Keynesian conception of the "long run" differs from that of neoclassicals and various neoclassical schools of Keynesian economics.
Post Keynesians argue, along with others, that what many call Keynesianism is, in fact, a counter-revolution against the economics of Keynes. Keynesianism, as developed by many American economists, teaches that involuntary unemployment is a temporary or medium-run phenomenon. Government pump-priming may be desirable, but if wages and prices were perfectly flexible, mainstream Keynesian economists believe, the labor market would eventually clear, as in the classical theory of unemployment.
An often underestimated contribution by Post Keynesian economics is in monetary theory. Basil J Moore's book "Horizontalists and Verticalists" pointed to an important difference between traditional monetary theory, where money is perceived exogenous to the real sector, and a Post Keynesian theory where money is endogenous. The terms "vertical" and "horizontal" refer to how traditional and Post Keynesian monetary theory view money supply: the former regard it as vertical, i.e., fixed at any point in time and thereby under complete control by the central bank; the latter consider money supply to be entirely regulated by the market for money, leaving only the funds rate in the hands of the central bank.
There are divisions within Post Keynesian economics, for example between American Post Keynesians such as Paul Davidson and the Cambridge (England) - Italian branch. The latter often focuses on issues of microeconomics, especially the capital controversy, and has historically been closely related to the neo-Ricardian school.
Post Keynesian economics emphasizes macroeconomics. Many Post Keynesians look to American Institutionalists for microeconomics. Institutionalists include such economists as Thorstein Veblen, John R. Commons, Wesley Clair Mitchell, John Maurice Clark, Clarence Ayres, Gunnar Myrdal (not an American), and John Kenneth Galbraith.
Much Post Keynesian research is published in the Journal of Post Keynesian Economics (founded by Sidney Weintraub and Paul Davidson), the Cambridge Journal of Economics and the Review of Political Economy.
The influence of Post Keynesian economics was greatest during the 1960s and 1970s, when the capital controversy was a focus of professional attention and the resurgence of unemployment showed up deficiencies in mainstream Keynesianism.
Post Keynesianism has not built any strong presence in the economics discipline. It prevails as an archipelago of economics departments across the academic landscape. It has failed to open a lasting dialogue with mainstream economics in part because of deep methodological differences. Mainstream economics relies heavily on mathematical methods, which Post Keynesians consider to have only limited application. According to them, key elements in the economic system, such as uncertainty and the role and stability of institutions, cannot be formalised to a degree that would be acceptable to mainstream economics.
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Economic policy
Monetary policy
Central bank Money supply
Fiscal policy
Spending Deficit Debt
Trade policy
Tariff Trade agreement
Finance
Financial market
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An abstract model (or conceptual model) is a theoretical construct that represents something, with a set of variables and a set of logical and quantitative relationships between them.
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- The importance of uncertainty, historical time, or non-ergodicity (as opposed to risk, logical time, and ergodic processes).
- The idea that money matters for the "real" economy (output, employment, etc.) in both the short and long runs.
- A rejection of neoclassical general equilibrium models.
"Logical time" is the type of "time" regarded in most models in neoclassical economics, i.e., comparative statics exercises in which an equilibrium is disturbed and the model automatically moves to a new, predetermined, equilibrium with no attention given to the process of getting there. In difference to this, Post Keynesians consider "historical time": the present is nothing but a moment in the passage from the immutable past to the unknowable future (to paraphrase Joan Robinson). Economy is always a dynamic process and (almost) never in an equilibrium state. The actual process of going from situation A to situation B is path dependent, helping to determine the character of situation B rather than it being predetermined. Thus, the Post Keynesian conception of the "long run" differs from that of neoclassicals and various neoclassical schools of Keynesian economics.
Post Keynesians argue, along with others, that what many call Keynesianism is, in fact, a counter-revolution against the economics of Keynes. Keynesianism, as developed by many American economists, teaches that involuntary unemployment is a temporary or medium-run phenomenon. Government pump-priming may be desirable, but if wages and prices were perfectly flexible, mainstream Keynesian economists believe, the labor market would eventually clear, as in the classical theory of unemployment.
An often underestimated contribution by Post Keynesian economics is in monetary theory. Basil J Moore's book "Horizontalists and Verticalists" pointed to an important difference between traditional monetary theory, where money is perceived exogenous to the real sector, and a Post Keynesian theory where money is endogenous. The terms "vertical" and "horizontal" refer to how traditional and Post Keynesian monetary theory view money supply: the former regard it as vertical, i.e., fixed at any point in time and thereby under complete control by the central bank; the latter consider money supply to be entirely regulated by the market for money, leaving only the funds rate in the hands of the central bank.
There are divisions within Post Keynesian economics, for example between American Post Keynesians such as Paul Davidson and the Cambridge (England) - Italian branch. The latter often focuses on issues of microeconomics, especially the capital controversy, and has historically been closely related to the neo-Ricardian school.
Post Keynesian economics emphasizes macroeconomics. Many Post Keynesians look to American Institutionalists for microeconomics. Institutionalists include such economists as Thorstein Veblen, John R. Commons, Wesley Clair Mitchell, John Maurice Clark, Clarence Ayres, Gunnar Myrdal (not an American), and John Kenneth Galbraith.
Much Post Keynesian research is published in the Journal of Post Keynesian Economics (founded by Sidney Weintraub and Paul Davidson), the Cambridge Journal of Economics and the Review of Political Economy.
The influence of Post Keynesian economics was greatest during the 1960s and 1970s, when the capital controversy was a focus of professional attention and the resurgence of unemployment showed up deficiencies in mainstream Keynesianism.
Post Keynesianism has not built any strong presence in the economics discipline. It prevails as an archipelago of economics departments across the academic landscape. It has failed to open a lasting dialogue with mainstream economics in part because of deep methodological differences. Mainstream economics relies heavily on mathematical methods, which Post Keynesians consider to have only limited application. According to them, key elements in the economic system, such as uncertainty and the role and stability of institutions, cannot be formalised to a degree that would be acceptable to mainstream economics.
Major Post Keynesian economists
- Paul Davidson[2]
- Alfred Eichner
- Richard Goodwin
- Nicholas Kaldor
- Michal Kalecki[3]
- Jan Kregel
- Hyman P. Minsky
- Luigi Pasinetti
- Piero Sraffa
- Joan Robinson
- Louis-Philippe Rochon[4]
- G. L. S. Shackle
- Sidney Weintraub
- James Crotty[5]
- Randall Wray
- Marc Lavoie[6]
- Basil Moore
- Edward Nell
- Anthony Thirlwall
References and notes
1. ^ There is semantic dispute as to whether there should be a hyphen between Post and Keynesian. The American journal of the same name does not use the hyphen, and the objection to its use dates back to Paul Samuelson's claim to be a post-Keynesian. However Geoff Harcourt (The Structure of Post-Keynesian Economics, 2006)uses the hyphen, following Joan Robinson's original use of the phrase.
2. ^ [1]
3. ^ [2]
4. ^ [3]
5. ^ [4]
6. ^ [5]
2. ^ [1]
3. ^ [2]
4. ^ [3]
5. ^ [4]
6. ^ [5]
External links
- American Economic Policy from 1920's to 1990's
- Secular Stagnation and Keynes in the Internet Age
- UK Post Keynesian Economics Study Group
- - article at Citizendium about this important post-Keynesian economist
Macroeconomic schools of thought |
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| Keynesian economics • Monetarism • New classical economics • New Keynesian economics • Neo-Keynesian Economics • Austrian School • Supply-side economics • Post-Keynesian economics |
John Maynard Keynes, 1st Baron Keynes, CB (pronounced "cains", IPA /keɪnz/) (5 June 1883 – 21 April 1946) was a British economist whose ideas, called Keynesian economics, had a major impact on modern economic and
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Keynesian economics (pronounced "kainzian", IPA /ˈkeɪnzjən/), also called Keynesianism, or Keynesian Theory
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Uncertainty is a term used in subtly different ways in a number of fields, including philosophy, statistics, economics, finance, insurance, psychology, engineering and science.
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For the Parker Brothers board game, see risk (game)
Risk is a concept that denotes a potential negative impact to an asset or some characteristic of value that may arise from some present process or future event.
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Risk is a concept that denotes a potential negative impact to an asset or some characteristic of value that may arise from some present process or future event.
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Ergodic theory, the study of ergodic transformations, grew out of an attempt to prove the ergodic hypothesis of statistical physics. Much of the early work in what is now called chaos theory was pursued almost entirely by mathematicians, and published under the title of "ergodic
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Money is any token or other object that functions as a medium of exchange that is socially and legally accepted in payment for goods and services and in settlement of debts.
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General equilibrium theory is a branch of theoretical microeconomics. It seeks to explain production, consumption and prices in a whole economy.
General equilibrium tries to give an understanding of the whole economy using a bottom-up approach, starting with individual
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General equilibrium tries to give an understanding of the whole economy using a bottom-up approach, starting with individual
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Please [improve the article] or discuss this issue on the talk page. This article has been tagged since August 2007.
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Please [improve the article] or discuss this issue on the talk page. This article has been tagged since August 2007.
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Fixed investment in economics refers to investment in fixed capital, i.e. tangible capital goods (real means of production or residential buildings), or to the replacement of depreciated capital goods.
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In economics, aggregate demand is the total demand for final goods and services in the economy (Y) during a specific time period. In a general aggregate supply-demand chart, aggregate demand (AD) slopes downward.
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Economic policy
Monetary policy
Central bank Money supply
Fiscal policy
Spending Deficit Debt
Trade policy
Tariff Trade agreement
Finance
Financial market
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For other uses, see Model.
An abstract model (or conceptual model) is a theoretical construct that represents something, with a set of variables and a set of logical and quantitative relationships between them.
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Neoclassical economics refers to a general approach in economics focusing on the determination of prices, outputs, and income distributions in markets through supply and demand.
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Joan Violet Robinson (October 31, 1903 in Surrey - August 5, 1983 in Cambridge) was a Marxist Keynesian economist who was well known for her knowledge of monetary economics and wide-ranging contributions to economic theory.
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Path-dependence is a phrase used to mean one of two things (Pierson 2004). Some authors use path-dependence to mean simply "history matters" - a broad conception - while others use it to mean that institutions are self reinforcing - a narrow conception.
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worldwide view.
Unemployment is the state in which a worker wants, but is unable, to work. The unemployment rate is the number of unemployed workers divided by the total civilian labor force...... Click the link for more information.
Government Deficits
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Microeconomics (or price theory) is a branch of economics that studies how individuals, households, and firms make decisions to allocate limited resources,[1] typically in markets where goods or services are being bought and sold.
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The Cambridge capital controversy refers to a 1960s debate in economics concerning the nature and role of capital goods (or means of production). The name arises because of the location of the those most involved in the controversy: the debate was largely between economists such as
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The neo-Ricardian school is an economic school that derives from the close reading and interpretation of David Ricardo by Piero Sraffa, and from Sraffa's critique of Neoclassical economics as presented in his The Production of Commodities by Means of Commodities
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Macroeconomics is a branch of economics that deals with the performance, structure, and behavior of a national economy as a whole.[1] Macroeconomists seek to understand the determinants of aggregate trends in an economy with particular focus on national income,
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Institutional economics, known by some as Institutional political economy, focuses on understanding the role of human-made institutions in shaping economic behavior. Aspects of institutional economics are part of mainstream economics -- in particular the so-called new institutional
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Thorstein Bunde Veblen (born Tosten Bunde Veblen July 30, 1857 – August 3, 1929) was a Norwegian-American sociologist and economist and a founder, along with John R. Commons, of the Institutional economics movement.
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John Rogers Commons (1862–1945) was a well-known institutional economist and labor historian at the University of Wisconsin-Madison.
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Life and career
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Wesley Clair Mitchell (August 5, 1874 – October 29, 1948) was an American economist known for his empirical work on business cycles and for guiding the National Bureau of Economic Research in its first decades.
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Karl Gunnar Myrdal (December 6, 1898 – May 17, 1987) was a Swedish economist and politician. He was born in Gustafs, Dalarna, and died in Danderyd, close to Stockholm.
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John Kenneth Galbraith (October 15 1908–April 29 2006) was an influential Canadian-American economist. He was a Keynesian and an institutionalist, a leading proponent of 20th-century American liberalism and progressivism.
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Sidney Weintraub (1914-1983) was one of the most prominent American members of the Post-Keynesian school in economics. He was born in New York, and was initially educated in the United States.
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