Saturday, November 30, 2019

Steve Keen on Keynes and Keynesianism

This is an older and short video in which Steve Keen is interviewed, and gives a short summary of Keynes’ economic ideas:

An important issue is Steve Keen’s point that Neoclassical synthesis Keynesianism was a misguided and distorted development of the General Theory and Keynes’ later articles, even though Keynes did allow this to happen in Chapter 18 of the General Theory, where he played down the role of uncertainty (as had been stressed in Chapter 12). As King notes, if Keynes had strongly maintained the crucial role of uncertainty, this would simply have “ruled out any stable functional relationship between investment and the interest rate” (King 2002: 14). The door was thereby left open for neoclassical synthesis Keynesians to reformulate the General Theory as a general equilibrium model where the interest rate has a pivotal role (King 2002: 14). On this issue, see my post here.

King, J. E. 2002. A History of Post Keynesian Economics since 1936. Edward Elgar Publishing, Cheltenham, UK and Northampton, MA.

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