Keynesian Chaos

This paper shows how nonperiodic fluctuations can emerge in the standard fix price macroeconomic model when induced investment is strong enough. Specific functional forms are used to illustrate the phenomenon and to compute numerical evidence that nonperiodic fluctuations need not be rare.     

Imports in Keynesian Models*

This paper examines two main problems relating to the introduction of imports in the simple Keynesian model. First, imports need to be made a function of the aggregate demand components rather than income. Second, unless one assumes that intermediate imports are zero the solution of the simple Keynesian model will provide miltipliers which Overstate the exogenous demand change for domestic product.     

Walras' Law and Keynesian Macroeconomics

This paper examines the claim that Keynesian models violate Walras' law. Walras' law is founded in the logic of exchange. Standard statements misrepresent it, as it pertains to a monetary economy. Keynesian models are consistent with Walras' law once this misrepresentation is corrected. The law holds for both notional and effective demands. It also holds in unconstrained Walrasian equilibria, constrained Walrasian equilibria, and constrained non-Walrasian equilibria. The latter corresponds to a Keynesian conception of equilibrium: markets need not clear, but agents expectations must be fulfilled.     

Keynesian Policy in Disarticulated Economies

Keynesian theory is, for several reasons, a weak basis for development policy. This paper argues fundamental obstacles to the construction of a coherent Keynesian development theory are the disarticulation of developing economies and the problem of economic sovereignty.     

Death and the Keynesian multiplier

The Blanchard-Yaari continuous-time model of overlapping generations is applied to a monetary economy with Keynesian unemployment. It is shown that a positive probability of death increases the short- and long-run multipliers of government spending on output. In the first example this is due to the government deficit being bond-financed, plus the failure of Ricardian equivalence which death implies. In the second, where the government budget remains balanced, it is due to the private accumulation of capital, which has a wealth effect on consumption. However, in the absence of death, this is negated by the higher lifetime tax burden.     

Keynesian Dominance in Crisis Therapy

The 1930s’ debate about the short-run Keynesian response to crisis and Hayek's critique of its long-run consequences has significant contemporary parallels. This article examines, from a historical perspective, the Keynes–Hayek debate by considering the development of Keynesian economic theory, its ascension and application during financially sound times, the Hayekian critique, the monetary counter-revolution, and the Keynesian renaissance in the wake of the global financial crisis. It is shown that Keynesian fiscal measures prevail over the Hayekian approach in the midst of a crisis leading to rising inflation and public debt, depressed long-run growth and a new crisis.     

Classical and Keynesian unemployment in Austria

The labor market in a macroeconometric model of Austria is used to determine the natural unemployment rate, full-employment (F.E.) output, and the F.E. real wage for 1966–92. Gaps between actual and F.E. variables are examined analytically and historically. Observed unemployment is decomposed into natural, hidden, classical, and Keynesian components. Classical unemployment is associated with the real wage gap, while Keynesian unemployment depends on the output gap. A rise in the natural rate is found to account for almost all of the increase in unemployment between 1966–74 and 1975–81, but an increase in Keynesian unemployment is the major factor in the rise of unemployment between 1975–81 and 1982–92. A fiscal shock to the complete model is found to increase real GDP for a year or two, reducing Keynesian unemployment without an appreciable rise in classical unemployment; the wage gap is eventually increased, however, producing a modest rise in classical unemployment.A lengthier version of this paper was presented at the Annual Meeting of the Austrian Economic Association, Graz, April 14–16, 1993. The generous finacial support of the Jubiläumsfonds of the Austrian National Bank for the research of which this paper is a part is gratefully acknowledged.     

不对称信息与凯恩斯主义投资理论

有效市场理论认为资本资产价格只不过是一幅面纱，实际经济活动是由经济主体的偏好和技术决定的。在凯恩斯主义体系中，金融市场在决定经济的路径中起到核心的作用。通过对金融市场上不对称信息的考察，可以得出这一结论。企业在外在融资的提供者即贷款者能够获取的信息是不同的，这种信息不对称导致金融约束的出现，在这种情况下，对投资的限制来自金融市场而不是来自技术或者偏好。     

The Cambridge School of Keynesian Economics

There have been strong ties between the Cambridge Journal ofEconomics (CJE) and the Cambridge School of Keynesian Economics,from the very beginning. In this paper, the author investigatesthe environment that saw the birth of the CJE at Cambridge (UK),in 1977, and the relationship that linked it to the direct pupilsof Keynes. A critical question is explicitly examined: why didn'tthe ‘Keynesian revolution’ succeed in becoming apermanent winning paradigm? Some behavioural mistakes of themembers of the Keynesian School may explain this lack of success,but only to a certain extent. In any case, there were and therestill are remedies too. But what we are inheriting is a uniqueset of analytical building blocks (the paper lists eight ofthem) that makes this School of economics a viable (and in somedirections definitely superior) alternative to mainstream economics.Admittedly, there is some important work still to be done. Thepaper highlights the need for a two-stage approach, addressingpure theory and extensive institutional analysis. It is arguedthat a combination of the two would strengthen the coherenceof the theoretical foundations, and at the same time would providea fruitful extension of economic analysis to empirical, institutionaland economic dynamics investigations.     

凯恩斯革命中的创新与继承

凯恩斯革命是从理论、政策、方法三个层面展开的。货币非中性论、货币供给外生论、对萨伊定理的彻底否定构成凯恩斯革命的理论基础;财政政策和货币政策是凯恩斯革命赖以实现的政策工具;对经济学研究对象的纠偏、破除传统的两分法和首创货币经济学是凯恩斯革命赖以完成的方法论。与此同时,《通论》内在逻辑上的不一致性,与经典学派崇尚经济自由传统的趋同,决定了凯恩斯革命中的继承。由于经济运行的常态是非充分就业均衡,《通论》必然具有永恒价值。     

Keynesian recovery: Reality down under

Recently in this journal, Liebling (1985) claimed that it was wholly a myth to regard the last recovery in the United States as due to classic Keynesian budget deficits. The reality was that supply-side initiatves were responsible. This might have disappointed adherents of traditional Keynesian fiscal policy, who had claimed this episode as support for their position. Yet the evidence from Australia's national accounts over the same period reaffirms the view of the effectiveness of the Keynesian position, particularly when a country is faced with a depressed economy.     

Keynesian theorising during hard times: stock-flow consistent models as an unexplored 'frontier' of Keynesian macroeconomics

This paper argues that the stock-flow consistent approach tomacroeconomic modelling (SFCA) is a natural outcome of the pathtaken by Keynesian macroeconomic thought in the 1960s and 1970s,a theoretical ‘frontier’ that remained largely unexploredwith the end of Keynesian academic hegemony. It does so in twosteps. First, it phrases the representative views of Davidson,Godley, Minsky and Tobin as different ‘closures’of the same (SFC) accounting framework, calling attention totheir similarities and logical implications. Second, it discussesunresolved issues within this approach and how it differs from‘modern’ theorising.