Alchian and Menger on Money

Carl Menger and Armen Alchian told stories of the emergence of money as a spontaneous order involving two types of costs—costs of recognizing attributes of goods and costs of finding willing exchange partners. Menger assumed that the first are zero and the second are positive. Alchian assumed the opposite. In the real world both types of costs are positive, so a truly satisfactory story of the emergence of money as a spontaneous order has yet to be written. This is another example of the complementarity of work done by some Austrian and some neoclassical economists.     

Keynes against Kalecki on economic method

In the past twenty years, there has been considerable debate on the “coherence” of post Keynesian economics, in view of post Keynesian economists’ ambitions to develop a paradigmatic alternative to neoclassical economics. Given the growing importance of methodological aspects in this discussion, this article addresses the differences of approach to economic theory between the fathers of the two most important strands in post Keynesian economics. We thus focus on Keynes’s criticism of Kalecki’s theory of the business cycle and the tensions between Keynes’s logical approach and Kaleki’s formal modeling. We show that in criticizing Kalecki’s theory, Keynes made use of the same methodological criticism (based on detecting logical fallacies in reasoning) he had employed to attack both the classical theory and contemporary “pseudo-mathematical” models. After illustrating these fundamental differences between Keynes and Kalecki about the proper way of doing economics, we draw some conclusions on the possible future evolution of post Keynesian economics.     

Keynes Theorie der Nachfrage nach Arbeit

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新凯恩斯货币政策模型

估计了新凯恩斯主义最优价格模型,并评估利用模型如何描述美国的产出、通货膨胀和利率变动;考虑模型中外在习惯形成是否影响消费者行为,并说明定价方法和通货指数形成价格和通胀惯性。该模型的时间一致均衡原则是用来估计关键行为参数的,据此研究最优货币政策的适应性。     

Zur Allgemeinen Theorie von Professor Keynes

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Keynes, uncertainty and interest rates

Uncertainty plays an important role in The General Theory, particularlyin the theory of interest rates. Keynes did not provide a theoryof uncertainty, but he did make some enlightening remarks aboutthe direction he thought such a theory should take. I arguethat some modern innovations in the theory of probability allowus to build a theory which captures these Keynesian insights.If this is the right theory, however, uncertainty cannot carryits weight in Keynes's arguments. This does not mean that theconclusions of these arguments are necessarily mistaken; intheir best formulation they may succeed with merely an appealto risk.     

Hayek, Keynes, and modern macroeconomics

The Great Recession seems to be creating a change in the trend of macroeconomic thinking. Prior to the financial crisis of 2008, dynamic stochastic general equilibrium (DSGE) models dominated the macroeconomics literature without any apparent challengers on the horizon. Since then, however, we have seen an increasing interest in macroeconomic models that address the state of confidence (??animal spirits??), complexity, cognition, and radical uncertainty. Most of the renewed interest in animal spirits, complexity, cognition, and radical uncertainty has come from a more or less ??Keynesian?? perspective. We discuss the potential to emphasize these elements from a more ??Hayekian?? perspective and argue that Austrian approaches to macroeconomics along these lines are more likely to resonate with mainstream economists than in years past.     

Keynes, population, and equity prices

Keynes in 1937 examined the phenomenon of the Great Depression from a longrun perspective in contradiction to the "General Theory," where the focus was on the shortrun. "Some Economic Consequences of a Declining Population," Keynes' article, reveals the context in which the "General Theory" was written. In the "General Theory," the focus is on short-term fluctuations, i.e., business cycles, but Keynes fails to provide any theoretical explanation as to why the depression of the 1930s was so severe and intractable. In the 1937 article, the depression is seen as the result of the combined effects of a decline in longrun growth due to population growth decline and a shortrun cyclical decline, together producing severe economic consequences. What is important for the purposes of this discussion is the implication, within the context of the 1937 article, that not only was the stock market crash of 1929 related to population change (with its accompanying collapse in expectations) but that, in general, changes in the rate of growth of population are accompanied by stock price movements in the same direction. The remainder of the discussion is devoted to a simple empirical test of this relationship. The data used are population size (POP), defined as the total residential population in the US from 1870-1979, and the Standard and Poor 500 Stock index (SP) for the corresponding 109-year period. In addition, a 3rd series was constructed, a price deflated Standard and Poor index (RSP) with a base period of 1870, to account for possible inflationary distortion of the index. The empirical results do not invalidate the hypothesis that population growth rates affect equity markets. In fact, there seems to be strong evidence that they are related in a manner suggestive of Keynes' intutition, namely, that the stock market crash of 1929 was due to factors more fundamental than those often perceived from a shortrun perspective. According to Keynes (1937), population is the most important determinant of longrun movements in real per capita income (given the state of technology, the real rate of interest, the age structure of the population, and the size share of income). So the focus is on population and its effects on economic growth. Due to the fact that the stock market presumably discounts longrun economic conditions as reflected in equity prices, it would seem that if Keynes were correct in his theoretical speculations, longterm equity price movements should relate to population change. In this sense, the paper may be regarded as an empirical test of a proposition of Keynes. More generally, the paper is suggestive in several ways. The relationship between business cycles and stock market cycles has been understood to the point of being rather obvious, but the effects of population on both has been less clear. It does appear on the basis of the evidence presented that the malaise of the stock market during the past 16 years, especially in real terms, may be due to factors more fundamental than those often perceived.     

精英之思——凯恩斯的逻辑基础

文章从社会福利最大化出发,分析了凯恩斯主义赖以存在的逻辑前提——精英之思——的方法论背景。凯恩斯的这一逻辑前提忽视了最大化者的制度约束条件以及社会福利函数存在的伦理和现实基础。失去了制度约束条件,凯恩斯的社会福利最大化的现实性是值得商榷的。     

Hans Singer's debts to Schumpeter and Keynes

This essay discusses Hans Singer's intellectual formation andthe influences on his early writings and on his post-1947 developmenteconomics. It asks what impact the unusual experience of studyingwith both Schumpeter and Keynes had upon his subsequent economicthinking and practice. It argues that the influence of boththese mentors was surprisingly small, compared with that ofSpiethoff and Clark. Singer repaid his debts to Schumpeter andKeynes, but by working in the new currency of development economics,some of which was his own coinage. His motivation for this vasteffort was derived from the social egalitarianism of figuressuch as William Beveridge, Archbishop Temple and R. H. Tawney,rather than the liberalism of Schumpeter and Keynes.     

The Economic Problem of Happiness: Keynes on Happiness and Economics

By stressing the substantial continuity of vision between John Maynard Keynes’s early unpublished essays and his more mature writings, the paper discusses Keynes’s ethics and focuses on his thoughts about happiness. In particular, we emphasize the anti-utilitarianism of Keynes’s vision and his belief that material wealth is but a precondition to enjoy the possibilities of a good life, and direct attention to problems of incommensurability raised by the multidimensional nature of happiness as considered by Keynes. We then argue that the rediscovery of Keynes’s legacy in this respect may be a precious counterweight to the most controversial aspects of today’s happiness research.     

Zur Geld- und Konjunkturtheorie von Professor Keynes

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