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.     

Vicarelli’s Keynes (and today’s international disorder)

The article speculates about the legacy of Fausto Vicarelli’s interpretation of John Maynard Keynes’s work in the times of a major global crisis. In particular, it puts an emphasis on those aspects of Keynes’s “method” that Vicarelli rightly considered as revolutionary in his Keynes, of 1977, as well as in other writings. The article then turns to Vicarelli’s reconstruction of Keynes’s early work in international economics (Indian Currency and Finance, Economic Consequences of the Peace) and reflects upon the continuing relevance of the philosophy inspiring Keynes’s plans of global reform in the Forties, also in the light of Vicarelli’s (Keynes-inspired) vision of the problem of policy space at the international level.     

经济辐射理论与我国经济发展战略构想

辐射既表现为自然界不同物体间的能量相互传递，也表现为人类社会资源的互相流动。经济辐射理论既可以深化我们对扩大开放的新认识，也可以说明区域、产业等经济发展中的非均衡到均衡过程。     

Old views and new perspectives: on reading Hick's ‘Mr. Keynes and the Classics’ *

This paper discusses the different macroeconomic models presented in Hicks's seminal 1937 article on the IS-LM (or SI-LL) approach. Hicks's treatment of the supply side Keynes's reaction to the different SI-LL models later developments of SI-LL by Hicks and his comments on the construction of SI-LL are discussed. It is argued that one of the different SI-LL models does indeed represent a faithful rendition of the analytical core of Keynes's General Theory and does belong more to the Marshall-Pigou-Keynes tradition than to a Walrasian tradition. Textbook IS-LM (and AS-AD) models are compared to the original SI-LL models. It is argued that textbook IS-LM is decisively different from the SI-LL approach this difference being the cause of presently discussed problems and obscurities of the textbook IS-LM/AS-AD approach.     

Keynes,investment, unemployment and expectations

In Keynes’ General Theory, investment determines effective demand, which determines unemployment and the labour market plays a negligible role. In New Keynesian models, labour market institutions determine the natural rate of unemployment and the speed at which unemployment adjusts to it. Investment is mostly ignored as a key variable behind the problem of high unemployment, despite a strong empirical association between investment and unemployment. We discuss the evolution of the ‘Keynesian’ model, and how in the process of domesticating the General Theory, the central relationship between unemployment and investment and the role of the state of confidence was bred out of the model. We then present some evidence of the centrality of investment and expectations to the long‐term evolution of unemployment in OECD countries. We also argue that recent results in finance, which find that individuals do not behave rationally and, moreover, that there may be no basis for rational calculation, provides support for Keynes’s notion that animal spirits play a central role in investment.     

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.     

Economic policy as expectations management: Keynes’ and Friedman's complementary approaches1

We investigate how Keynes and Friedman, respectively, address the issue of the disequilibria at stake in a monetary economy through a shared concern for the formation of expectations. We show that Keynes was interested in the coordination of long-term expectations regarding non-monetary assets prospective yields, while Friedman focused on the adaptation of short-term nominal expectations. Regarding the remedies to these disequilibria, both economists called for devices that aim to stabilise market expectations. As a direct outcome, Keynes designed policies that aim to stabilise the long-term state of expectations while Friedman basically aimed at the acceleration of the competitive adjustment process.     

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.     

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。     

资源约束与中国经济发展

本文从中国经济转轨实践出发,把中国的发展约束分成体制约束和资源约束两类.比较起来,在中国和平崛起的过程中,资源约束问题更加值得关注.本文指出,在需求膨胀和效率损失的双重作用下,中国资源约束的表现形式已经从流量约束迅速转化为存量约束,对此,应在保障需求与开放系统思路下,从公共政策研究入手加强有关政策体系建设.     

On Closed Systems and the Language of Economic Discourse

This article addresses a few of the major points identified by Tony Lawson in his book Reality and Economics(Routledge 1997). Traditional economic models are profoundly closed, emanating from reasoning processes that are both deductivist and positivist by nature. Here, individuals are prescribed to behave according to mechanical, socially abstracted fashions that, in fact, belie any semblance of real human choice. Moreover, as Lawson observes, relationality in these models is strictly external, in that the natures of individuals are not affected by their participation in market activity. Under these conditions, models can be easily constructed by which markets yield unique equilibrium outcomes, whereby the constancy of the conjunctions of events yield law-like economic assertions.

Instead, Lawson embraces a critical realist perspective that posits human behavior to be both structured and internallyrelational, i.e., where interactions with others can affect the very natures of those individuals. As such, human relations can be temporally situated in the context of structured social contracts, while still embodying the organic elements from which those agents and structures can be reproduced and transformed.

From these principles, this essay explores some recent work in Keynesian and Post Keynesian thought. In addition, this critical realist framework considers some developments in New Keynesian Economics and Endogenous Growth Theory.     

Permanent On-The-Spot Job Creation—The Missing Keynes Plan for Full Employment and Economic Transformation

The paper rejects the conventional view that Keynes had an aggregate demand approach to full employment. Instead, it proposes that he advocated a very specific labor demand targeting approach that would be implemented both in recessions and expansions. Modern policies, which aim to “close the demand gap” between current and potential output are inconsistent with Keynes's work on theoretical and methodological grounds. There is considerable evidence to suggest that a permanent program for direct or (in his words) “on-the-spot” job creation is the missing Keynes Plan for full employment and economic transformation. The current crisis presents the social economist with a unique opportunity to set fiscal policy straight along the original Keynesian lines. The paper suggests what specific form such a policy might take.     

转变经济发展方式研究现状综述及未来展望

对现有西方经济增长理论体系、我国转变经济发展方式的内涵、实现途径、推动力和发展阶段以及转变经济发展方式指标体系的研究成果进行梳理发现:未来研究应有效整合各学科相关理论,注重研究的均衡性、灵活性和预见性,重视改善民生在转变经济发展方式中的重要性,细化TFP的测算方法等。     

国家意愿与西部地区经济的持续增长——基于陕西的实证研究

本文通过建立一简单的新古典经济增长核算模型,对西部地区经济增长绩效进行了实证分析.结果表明,由政府主导的西部大开发战略的实施,推动了西部地区经济的快速增长.但是,其增长在很大程度上所依赖的是资本要素的投入特别是政府投资的增加,而非要素生产率水平的提高.这意味着,继续维持这种粗放型的经济增长模式,西部地区经济的持续增长将难以为继,而且对于西部地区经济结构的调整、市场的发育以及生产率水平的提高将会产生极为不利的影响.     

调整优化经济结构 促进发展方式转变

调整和优化经济结构,促进经济发展方式转变是长期而艰巨的战略任务,要考虑多方面因素,制定长期目标和阶段性目标。调整和优化经济结构,转变经济发展方式既要依靠政府政策,更要发挥市场配置资源的基础作用。     

Friedman and Keynes: divergences and convergences *

Milton Friedman claims to have succeeded the Keynesian revolution with a counter-revolution which, incorporating certain features of Keynes's thought, triumphed at the end of the 1960s. This paper presents a general assessment of the relationship between these thinkers, in the domain of politics, methodology and economics, the emphasis being put on Friedman's reading of Keynes. In many places, Friedman stresses the convergences between his vision and Keynes's, as against the latter's Walrasian disciples. However, despite certain points of agreement at the methodological level, the two authors are radically opposed in terms of political vision and economic analysis.     

Keynes’ Preface to the German Edition of the General Theory: Nazi Sympathies or Methodological Empathies?

In the (1936) preface to the German edition of The General Theory of Employment, Interest and Money, Keynes contrasts his methodology with that of Classical laissez-faire economics. He also compares and contrasts his methodology with German economics, which members of the German Historical School had heavily influenced. Unfortunately, some view Keynes as arguing in this Preface that his theory could more deductively apply to fascism than to laissez-faire economies. This would suggest an endorsement of Nazism. Of course, any support offered for Nazism should be condemned. However, instead of displaying Nazi sympathies, this paper argues that the Preface more likely supports the widespread methodological rejection in German economics of deducing laissez-faire outcomes from Classical postulates. Furthermore, Keynes criticizes the more inductive approach of many German economists, and states that he provides them with the theoretical framework which they could deductively apply to their totalitarian economy. Keynes should be read as arguing that his theoretical framework would prove more applicable to a totalitarian system than would a theory based on Classical laissez-faire economics. Comments in the Preface which seem to some to support Nazism should be taken, then, as support for the applicability of his theory to such a system. Keynes’ methodological arguments in the prefaces to the other editions, which reflect his overall methodological approach in the General Theory, his familiarity with German economics, his support for liberal economic and political institutions, and his anti-Nazism, all support this alternative interpretation. An earlier version of this paper was presented at the Midwest Economics Association Meetings in Chicago on March 16, 2008.     

High pressure and black clouds: Keynes and the frequentist theory of probability

The thesis of this paper is that Keynes wrote A Treatise onProbability in opposition to the frequentist theory of probability,systematised by John Venn, which denied any role for probabilityin decision theory. Keynes was interested in finding an alternativeconception of probability that could be utilised as a guideof life. To analyse this point, the paper considers Keynes'scriticisms of frequentist tradition in the two versions of hisFellowship dissertation, and in the published edition of hisTreatise. Keynes's project is then illustrated with the famousexample of whether or not to go out with one's umbrella in thesituation in which the pressure is high and the clouds are black.     

空间知识溢出与我国区域经济发展政策研究

依托空间知识溢出修正模型,根据我国31个省级行政区面板数据的实证研究,揭示我国区域经济发展中的“知识溢出盆地”现象;同时根据区域间知识溢出效应的差异和实证结果,对我国区域经济发展和区域技术追赶问题进行分析研究,为我国区域经济发展提出相应的政策建议。     

Knowledge Questions: Hayek,Keynes and Beyond

This paper discusses the knowledge problem in terms of both the use and generation of knowledge. This is analyzed in the context of Hayek's failure to respond to the Keynes Challenge—the claim that markets fail to produce relevant knowledge—by suggesting that in the aftermath of The General Theory he was not well-positioned to address that problem. Ironically, his post-World War II work in cognitive psychology, The Sensory Order, offers a theory of the generation of knowledge which can provide a useful analogy for understanding the generation of market-level knowledge.