Post Keynesian economics
Post Keynesian economics 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, emphasising in particular:
- The importance of uncertainty, historical time, or non-ergodicity (as opposed to risk, logical time, and ergodic processes).
- The idea that money matters in all runs.
- A rejection of neoclassical general equilibrium models.
Post Keynesian economists believe that a capitalist
economy has no natural tendency towards full
employment. Investment is a major determinant of
the level of aggregate demand. Decisions on the
level and direction of investment are made in
anticipation of future events, which agents cannot
know even probabilistically, in some sense. Post
Keynesians emphasize the need for government policy
to support institutions to support employment and
incomes.
Post Keynesians believe, along with others, that what many
call Keynesianism is, in fact, a counterrevolution
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.
There are divisions within Post Keynesian economics, e.g.
between American Post Keynesians such as Paul Davidson
and the Cambridge (England) - Italian branch.
Post Keynesian economics emphasizes macroeconomics.
Many Post Keynes 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.
Major Post Keynesian Economists
- Paul Davidson
- Alfred Eichner
- Richard Goodwin
- Nicholas Kaldor
- Michal Kalecki
- Jan Kregel
- Luigi Pasinetti
- Piero Sraffa
- Joan Robinson
- G. L. S. Shackle
- Sidney Weintraub