by These talks by Victoria Chick and Engelbert Stockhammer give an introduction to Post Keynesian economics, and were held on 20th October, 2015 at the McGrath Centre, St Catharine’s College, UK.[embedded content]One could add that some modern Post Keynesians have argued that Keynes’ marginal efficiency of capital (MEC) idea in the General Theory meant he failed to properly free himself from the neoclassical marginal productivity of capital concept (King 2002: 209). Admittedly, other Post Keynesians think the marginal efficiency of capital concept is sound (see, for example, the view of Shackle 1965: 99).However, for critics of the MEC, the trouble is that it seems to suggest that there exists a rate of interest which is low enough to induce full utilization of capital goods. But this is just smuggling in the Wicksellian natural rate of interest, when Keynes had wanted to abandon the natural rate. That is to say, Keynes did not sufficiently stress the role of uncertainty and expectations in undermining the coordinating role of interest rates (King 2002: 14).
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One could add that some modern Post Keynesians have argued that Keynes’ marginal efficiency of capital (MEC) idea in the General Theory meant he failed to properly free himself from the neoclassical marginal productivity of capital concept (King 2002: 209). Admittedly, other Post Keynesians think the marginal efficiency of capital concept is sound (see, for example, the view of Shackle 1965: 99).
However, for critics of the MEC, the trouble is that it seems to suggest that there exists a rate of interest which is low enough to induce full utilization of capital goods. But this is just smuggling in the Wicksellian natural rate of interest, when Keynes had wanted to abandon the natural rate. That is to say, Keynes did not sufficiently stress the role of uncertainty and expectations in undermining the coordinating role of interest rates (King 2002: 14). In Chapter 18 of the General Theory, Keynes played down the role of uncertainty (which he had stressed in Chapter 12) and, if he had really maintained the crucial role of uncertainty (as he did later in Keynes 1937), this would have “ruled out any stable functional relationship between investment and the interest rate” (King 2002: 14). The door was thereby left open for neoclassical synthesis Keynesians to reformulate the General Theory as a general equilibrium model where the interest rate has a pivotal role (King 2002: 14). That was where mainstream Keynesians after WWII took a terribly wrong turn.
By contrast, Post Keynesians took the role of uncertainty seriously and dispensed with those problematic aspects of the General Theory that are a legacy of neoclassical theory (for Keynes’ mistakes in the General Theory, see here).
Finally, I add below my list of recent books on Post Keynesian economics and Modern Monetary Theory (MMT):
Further ReadingIntroductory Studies
Davidson, Paul. 2009. The Keynes Solution: The Path to Global Economic Prosperity (1st edn). Palgrave Macmillan, New York and Basingstoke.Lavoie, Marc. 2009. Introduction to Post-Keynesian Economics (2nd rev. edn.). Palgrave Macmillan, Basingstoke, UK.
Skidelsky, R. J. A. 2010. Keynes: The Return of the Master (rev. and updated edn.). Penguin, London.
King, J. E. 2012. The Elgar Companion to Post Keynesian Economics (2nd edn.). Edward Elgar, Cheltenham.
This is the second and updated edition of this work (1st edn. King 2003) that gives excellent short essays and overviews of all major subjects in Post Keynesian economics. This is a splendid first port of call for any research, especially for the beginner.Wray, L. Randall. 2012. Modern Money Theory: A Primer on Macroeconomics for Sovereign Monetary Systems. Palgrave Macmillan, New York.
King, John E. 2015. Advanced Introduction to Post Keynesian Economics. Edward Elgar, Cheltenham.
An advanced introduction to Post Keynesian economics by John E. King, whose work is always outstanding. Publisher details and the contents can be seen here. In particular, Chapter 8 is a discussion of the global financial crises of 2008 as interpreted in Post Keynesian theory.Advanced and Specialist Literature
Hayes, Mark. 2006. The Economics of Keynes: A New Guide to The General Theory. Edward Elgar, Cheltenham.Pasinetti, Luigi L. 2007. Keynes and the Cambridge Keynesians: A ‘Revolution in Economics’ to be Accomplished. Cambridge University Press, Cambridge.
Tily, Geoff. 2007. Keynes Betrayed: Keynes’s General Theory, The Rate of Interest and Keynesian Economics. Palgrave Macmillan, New York.
Godley, Wynne and Marc Lavoie. 2007. Monetary Economics: An Integrated Approach to Credit, Money, Income, Production and Wealth. Palgrave Macmillan, New York, N.Y.
Mitchell, William and Joan Muysken. 2008. Full Employment Abandoned: Shifting Sands and Policy Failures. Edward Elgar, Cheltenham.
Davidson, Paul. 2009. John Maynard Keynes (rev. edn.). Palgrave Macmillan, Basingstoke.
Hein, Eckhard and Engelbert Stockhammer (eds.). 2011. A Modern Guide to Keynesian Macroeconomics and Economic Policies. Edward Elgar, Cheltenham.
A recent collection of essays on many different subjects.Keen, Steve. 2011. Debunking Economics: The Naked Emperor Dethroned? (rev. and expanded edn.). Zed Books, London and New York.
This is the revised and updated version of Keen’s earlier work (Keen 2001).Davidson, Paul. 2011. Post Keynesian Macroeconomic Theory: Foundation for Successful Economic Policies for the Twenty-First Century (2nd edn). Edward Elgar Publishing, Cheltenham.
Harcourt, G. C. and Peter Kriesler (eds.). 2013. The Oxford Handbook of Post-Keynesian Economics. Volume 1: Theory and Origins. Oxford University Press, New York.
Harcourt, G. C. and Peter Kriesler (eds.). 2013. The Oxford Handbook of Post-Keynesian Economics. Volume 2: Critiques and Methodology. Oxford University Press, New York.
A two volume collection of essays and advanced overviews of many different issues in Post Keynesian economics.Lee, Frederic S. and Marc Lavoie (eds.). 2013. In Defense of post-Keynesian and Heterodox Economics: Responses to their Critics. Routledge, London.
Jespersen, Jesper and Mogens Ove Madsen (eds.). 2013. Teaching Post Keynesian Economics. Edward Elgar, Cheltenham, UK.
A collection of papers by leading Post Keynesian economists.Lavoie, Marc. 2014. Post-Keynesian Economics: New Foundations. Edward Elgar, Cheltenham.
This is the newly updated and expanded version of Lavoie’s earlier work (Lavoie 1992). It runs to 680 pages, and is possibly the best and most authoritative work available.Davidson, Paul. 2015. Post Keynesian Theory and Policy: A Realistic Analysis of the Market Oriented Capitalist Economy. Edward Elgar Publishing, Cheltenham, UK.
Mitchell, Bill and L. Randall Wray. Modern Monetary Theory and Practice (forthcoming).
This textbook on MMT appears to be forthcoming. There is a table of contents here.Halevi, Joseph, Harcourt, G. C., Kriesler, Peter and John Nevile. 2016. Post-Keynesian Essays from Down Under. Theory and Policy in an Historical Context. Volume I: Essays on Keynes, Harrod and Kalecki. Palgrave Macmillan, Basingstoke, UK.
Halevi, Joseph, Harcourt, G. C., Kriesler, Peter and John Nevile. 2016. Post-Keynesian Essays from Down Under. Volume II: Essays on Policy and Applied Economics. Theory and Policy in an Historical Context. Palgrave Macmillan, Basingstoke, UK.
Halevi, Joseph, Harcourt, G. C., Kriesler, Peter and John Nevile. 2016. Post-Keynesian Essays from Down Under. Volume III: Essays on Ethics, Social Justice and Economics. Theory and Policy in an Historical Context. Palgrave Macmillan, Basingstoke, UK.
Halevi, Joseph, Harcourt, G. C., Kriesler, Peter and John Nevile. 2016. Post-Keynesian Essays from Down Under. Volume IV: Essays on Theory. Theory and Policy in an Historical Context. Palgrave Macmillan, Basingstoke, UK.
Wray, L. Randall. 2016. Why Minsky Matters: An Introduction to the Work of a Maverick Economist. Princeton University Press, Princeton.
“A Bibliography on the History of Post Keynesian Economics (updated),” September 6, 2014.
“Post Keynesian Textbooks,” July 5, 2011.
“Bibliography on Post Keynesian Economics,” July 6, 2011.
“Bibliography on Post Keynesian Methodology,” September 16, 2013.
“Bibliography on Keynes’s Theory of Probability (Updated),” July 6, 2014.
“Bibliography on Uncertainty in Post Keynesian Economics (Updated),” May 21, 2014.
“Keynes’s Mistakes in the General Theory,” May 7, 2013.
“John King on ‘Post Keynesians and Others,’” July 11, 2014.
BIBLIOGRAPHY
Keynes, J. M. 1937. “The General Theory of Employment,” Quarterly Journal of Economics 51: 209–223.
King, J. E. 2002. A History of Post Keynesian Economics since 1936. Edward Elgar Publishing, Cheltenham, UK and Northampton, MA.
King, J. E. (ed.). 2003. The Elgar Companion to Post Keynesian Economics. Edward Elgar, Cheltenham, UK and Northhampton, MA.
Keen, S. 2001. Debunking Economics: The Naked Emperor of the Social Sciences. Zed Books, New York and London.
Lavoie, Marc. 1992. Foundations of Post-Keynesian Economic Analysis. Edward Elgar Publishing, Aldershot, UK.
Shackle, G. L. S. 1965. A Scheme of Economic Theory. Cambridge University Press, Cambridge.