Keynes's General Theory: Seventy-Five Years Later
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This volume, a collection of essays by internationally known experts in the area of the history of economic thought and of the economics of Keynes and macroeconomics in particular, is designed to celebrate the 75th anniversary of the publication of The General Theory.
The essays contained in this volume are divided into four sections. The first section contains three essays that explore the concept of fundamental uncertainty and its unique role in The General Theory. The second section contains four essays that examine the place of The General Theory in the history of macroeconomics since 1936. The third section contains three essays that explore the interrelationships among Keynes, Friedman, Kaldor, Marx and Sraffa and their approaches to macroeconomic theory and policy. The final section contains a pair of essays that provide several new interpretations of The General Theory and its position within macroeconomics.
Keynes's General Theory is intended for those students and scholars who are interested in the economics of Keynes and the rich variety of approaches to macroeconomic theory and policy.
product and real wage exceed the marginal disutility of that amount of employment (Keynes, CW, vol. VII, p. 291). Entrepreneurial firms exist, not to hire labour, but to make profit. By definition, wage-labour does not make the hiring decision, and the primary purpose of The General Theory is to explain how firms can find it unprofitable under competitive conditions to employ more labour, even though unemployed labour is for hire at the going rate. At the root of this problem is that both workers
Review, 58(1) (March), 1–17. Friedman, M. (1974), ‘A theoretical framework for monetary analysis’, in R. J. Gordon (ed.), Milton Friedman’s Monetary Framework, Chicago, IL: Chicago University Press, pp. 1–62, 132–77. Goodfriend, M. and R. King (1997), ‘The new neoclassical synthesis and the role of monetary policy’, in B. Bernanke and J. Rotenberg (eds), NBER Macroeconomics Annual 1997, Cambridge, MA: The MIT Press, pp. 231–83. Harrod, R. F. (1937 ), ‘Mr. Keynes and traditional theory’,
the wheel in new notation. M2829 - CATE 9781845424114 print.indd 120 21/12/2011 16:54 The roots of the present are in the past 121 NOTE 1. I am grateful for helpful comments on earlier versions of this chapter at an international conference on the history of macroeconomics at Louvain-la-Neuve and at the ‘Keynes at 125’ mini-conference at the Canadian Economics Association annual meeting in Vancouver in 2008. BIBLIOGRAPHY Abraham, K. G. and J. C. Haltiwanger (1995), ‘Real wages and the
target level or within some target band but allows inflation to drift above this level or band as a result of short run cost shocks (Bernanke and Mishkin 1997). Taylor (1998) argues that this approach to monetary policy, commenced in the United States in the late 1980s, was directly responsible for lower and more stable US inflation as well as greater stability in the path of US GDP. Panels D, E and F of Figure 6.1 indicate these characteristics of US inflation and GDP performance from the second
economic crises. In this sense, Keynes’s vision is nested within that of Adam Smith’s. Placing the models of Smith and Keynes in the same nest allows the successes of capitalism to hatch. They are embedded together for the purpose of tackling spiraling growth and threatening business cycles. The literature that fiercely debates this nesting is whether the two models are a special case of each other, that is, hierarchically nested. A.C. Pigou stated ‘. . . Keynes’ claim that a scheme built on the