Keynes And Macroeconomics After 70 Years: Critical Assessments of The General Theory

354 Pages·2009·5.89 MB·English

by  L. Randall Wray

Keynes and Macroeconomics after 70 Years
To the memory of
Hyman Minsky
Robert Heilbroner
Tom Asimakopulos
Robert Eisner
John Kenneth Galbraith
To Paul and Louise Davidson
Keynes and
Macroeconomics
after 70 Years
Critical Assessments of The General Theory
Edited by
L. Randall Wray
Center for Full Employment and Price Stability,University of
Missouri–Kansas City,USA
and
Mathew Forstater
Center for Full Emploment and Price Stability,University of
Missouri–Kansas City,USA
Edward Elgar
Cheltenham,UK • Northampton,MA,USA
© L.Randall Wray and Mathew Forstater 2008
All rights reserved.No part of this publication may be reproduced,stored in a
retrieval system or transmitted in any form or by any means,electronic,
mechanical or photocopying,recording,or otherwise without the prior
permission of the publisher.
Published by
Edward Elgar Publishing Limited
The Lypiatts
15 Lansdown Road
Cheltenham
Glos GL50 2JA
UK
Edward Elgar Publishing,Inc.
William Pratt House
9 Dewey Court
Northampton
Massachusetts 01060
USA
A catalogue record for this book
is available from the British Library
Library of Congress Control Number:2008937108
ISBN 978 1 84720 581 0(cased)
Printed and bound in Great Britain by MPG Books Ltd,Bodmin,Cornwall
Contents
List of contributors vii
Introduction L.Randall Wray and Mathew Forstater ix
PART I KEYNES AND HETERODOX ECONOMICS
1 Heterodox macroeconomics:what,exactly,are we against? 3
John E.King
2 Keynes the Keynesian:a Lakatosian insight into Keynes’s
‘probable’theoretical contributions to macroeconomics after
1937 20
Jesús Muñoz and Joel Bonales
PART II FOUNDING FATHERS OF POST KEYNESIAN
ECONOMICS
3 Minsky and Keynes on investment volatility:was there an
overstatement? 37
André Lourenço
4 Two founding fathers of the Post Keynesian critical appraisal
of self-balancing mechanisms? 51
Lino Sau
5 The contributions of Tom Asimakopulos to Post Keynesian
economics 64
G.C.Harcourt
6 Asimakopulos’s criticism of Keynes’s short-period
equilibrium:a reformulation 80
Abdelkader Slifi
PART III KEYNESIAN MODELS
7 Modeling Keynes with Kalecki 99
Colin Richardson and Jerry Courvisanos
8 A Keynesian model for the 21st century 123
H.Sonmez Atesoglu
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vi Keynes and macroeconomics after 70 years
9 Capital accumulation,income distribution,technical progress
and endogenous money in a Post Keynesian macrodynamic
model 137
Luciano Dias Carvalho and José Luís Oreiro
PART IV KEYNESIAN POLICY
10 Keynes on the control of the money supply and the interest
rates 157
Carlo Panico
11 Inflation targeting in Brazil:a Keynesian approach 176
Luiz Carlos Bresser-Pereira and Cleomar Gomes da Silva
12 Eisner’s radical approach to social security – tell the truth! 196
Stephanie Kelton
PART V MODERN DEVELOPMENT AND EXTENSIONS
OF KEYNESIAN ECONOMICS
13 Investment finance and financial sector development 207
Bokhyun Cho
14 Keynes’s theory of probability,investment behavior,and
behavioral finance 223
Edwin Dickens
15 Real exchange rate levels,investment and growth:a Keynesian
perspective 234
Paulo Gala
16 A reinterpretation,remedy and development of Keynes’s
liquidity preference theory 245
Wenge Huang
17 Keynes’s ‘revolving fund of finance’and transactions in the
circuit 259
Steve Keen
18 Monetary and fiscal policies in a Post Keynesian stock–flow
consistent model 279
Edwin Le Heron
19 Expectations and unemployment 309
J.W.Nevile and Peter Kriesler
Index 321
Contributors
H. Sonmez Atesoglu is Professor of Economics at Clarkson University,
Potsdam,NY,USA.
Joel Bonales is Professor and Researcher in Economics at the Universidad
Latinamericana,the Universidad Panamericana,Mexico City,Mexico.
Luiz Carlos Bresser-Pereira is Professor Emeritus of Economics and
Political Theory at the Getulio Vargas Foundation in São Paulo,Brazil.He
is also editor of the Brazilian Journal of Political Economy.
Luciano Dias Carvalho is Assistant Professor of Economics at State
University of the West of Paraná,Francisco Beltrão,Brazil.
Bokhyun Cho is Professor of Economics at the Hanbat National
University,Daejeon,South Korea.
Jerry Courvisanosis Senior Lecturer in Innovation and Entrepreneurship
in the School of Business at the University of Ballarat,VIC,Australia.
Cleomar Gomes da Silvais Professor of Economics of the Getulio Vargas
Foundation in research at the Center for International Economics, São
Paulo,Brazil.
Edwin Dickens is in the Department of Economics and Finance at Saint
Peter’s College,Jersey City,NJ,USA.
Mathew Forstateris Associate Professor of Economics at the University of
Missouri–Kansas City,USA.
Paulo Galais Assistant Professor at the São Paulo School of Economics,
São Paulo,Brazil.
G.C.Harcourtis Reader in the History of Economic Theory and a Fellow
of Jesus College at Cambridge University,Cambridge,United Kingdom.
Wenge Huang holds an MBA degree from China Europe International
Business School and now serves as a Vice President of Beijing Jiuzhouding
Investment Consulting Co.,Ltd,Beijing,China.
Steve Keen is Associate Professor of Economics and Finance at the
University of Western Sydney,Penrith,NSW,Australia.
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viii Keynes and macroeconomics after 70 years
Stephanie Keltonis Assistant Professor of Economics at the University of
Missouri–Kansas City, Kansas City, MO, USA and a Research Scholar
with the Center for Full Employment and Price Stability.
John E.Kingis Professor of Economics in the Department of Economics
and Finance at La Trobe University,Melbourne,VIC,Australia.
Peter Kriesler is Associate Professor at the Centre for Applied Economic
Research at the University of New South Wales,Sydney,NSW,Australia.
Edwin Le Heron is Professor at the Institute of Political Sciences in
Bordeaux, France and President of the French Association for the
Development of Keynesian Studies.
André Lourençois Professor ofMacroeconomics at Federal University Rio
Grande do Norte in Natal,Brazil.
Jesús Muñozis Professor and Researcher in Economics at the Universidad
Latinamericana, the Universidad Panamericana, and at the Center for
Economic,Managerial and Social Research at the National Polytechnique
Institute,Mexico City,Mexico.
J.W. Nevile is Visiting Emeritus Professor at the Centre for Applied
Economic Research at the University of New South Wales,Sydney,NSW,
Australia.
José Luís Oreirois Associate Professor ofEconomics at Federal University
of Paraná,Curitiba,Brazil.
Carlo Panico is Professor of Economics in the Department of Economic
Theory and Applications at the University of Federico II of Naples,
Naples,Italy.
Colin Richardson is at Imperial College, London, England and the
University of Abertay,Dundee,Scotland.
Lino Sau is a Senior Researcher of Political Economy in the School of
Communication Studies at the University of Turin,Turin,Italy.
Abdelkader Slifi is Assistant Professor at the University of Picardie Jules
Verne,Amiens,France.
L.Randall Wrayis Professor of Economics at the University of Missouri–
Kansas City,Kansas City,MO,USA.
Introduction
L. Randall Wray and Mathew Forstater
This volume contains a selection of the papers that were presented at the
9th International Post Keynesian Conference, organized by Jan Kregel,
Mathew Forstater, and L. Randall Wray and held at the University of
Missouri–Kansas City (UMKC) in September 2006. The conference was
jointly sponsored by the Journal of Post Keynesian Economics, UMKC’s
Center for Full Employment and Price Stability (CFEPS), and the
Economics Department of UMKC.The conference is normally part of a
workshop that takes place every other year,carrying on the long tradition
that was begun in the 1980s by Jan Kregel,Piero Garengnani,and Sergio
Paranello. The workshops were originally held in Trieste, Italy, and were
continued by Paul Davidson at the University of Tennessee–Knoxville
before finally settling in Kansas City.
Traditionally, the workshop includes both a conference and a summer
school,combined over a 10–14-day period.However,because the 2006 con-
ference would be celebrating several significant anniversaries,it was sched-
uled for September,and the summer school was held separately in June.The
summer school was a smashing success,with over 70 graduate students and
faculty from around the world discussing not only a wide range of topics
in Post Keynesian economics but also institutionalist,Marxian,and fem-
inist economics. In addition, anthropology, sociology, and Black studies
were included in the curriculum, reflecting the interdisciplinary nature of
UMKC’s PhD program.Many of the students and faculty would return to
Kansas City for the conference in September.
We are most grateful to the members of the summer school faculty for
volunteering their time: Morteza Ardebili, Barbara Bonnekessen, Robert
Brazelton,S.‘Charu’Charusheela,Jerry Courvisanos,Colin Danby,Eliseo
Fernandez,Mathew Forstater,Scott Fullwiler,Michael K.Green,John F.
Henry, Jan Kregel, Frederic S. Lee, John Marangos, Donald Matthews,
Jesús Muñoz, Christopher Niggle, Erik Olsen, Tanya Y. Price, Michael J.
Radzicki, Jim Sturgeon, Linwood Tauheed, Pavlina Tcherneva, James
Webb,and L.Randall Wray.
More than 150 economists from around the world attended the
September conference,which celebrated:the 60th anniversary of Keynes’s
ix