Table of Contents

Contemporary Post Keynesian Analysis

Contemporary Post Keynesian Analysis

Edited by L. Randall Wray and Mathew Forstater

Original articles by leading scholars of post Keynesian economics make up this authoritative collection. Current topics of the greatest interest are covered, such as: perspectives on current economic policy; post Keynesian approaches to monetary theory and policy; economic development, growth and inflation; Kaleckian perspectives on distribution; economic methodology; and history of heterodox economic theory. The contributors explore a variety of prevailing issues including: wage bargaining and monetary policy in the EMU; the meaning of money in the internet age; stability conditions for small open economies; and economic policies of sustainable development in countries transitioning to a market economy. Other enduring matters are examined through the lens of economic theorists – Kaleckian dynamics and evolutionary life cycles; a comparison between Keynes’s and Hayek’s economic theories; and an analysis of the power of the firm based on the work of Joan Robinson, to name a few.

Chapter 14: On the Relation Between Individual and Collective Beliefs: A Comparison Between Keynes’s and Heyek’s Economic Theories

Richard Arena

Subjects: economics and finance, post-keynesian economics


14. On the relation between individual and collective beliefs: a comparison between Keynes’s and Hayek’s economic theories Richard Arena Many articles and meetings have been dedicated to the relationship between Keynes’s and Hayek’s contributions to economic theory. Not surprisingly, most of them focus on monetary and business cycle theories: both topics were extensively discussed by the authors in the Economic Journal as well as in a famous private correspondence. This is why we will not consider these topics once again (see, for example, Arena, 1999a) but rather compare Keynes’s and Hayek’s contributions to a different issue: the relation between knowledge and beliefs, on the one hand, and economics, on the other hand. More precisely, we will consider what is the role given by both authors to individual and, possibly, collective beliefs in the analysis of the working of the global economic system and, more particularly, of markets. Our project could be considered a rather strange attempt: Keynes and Hayek devoted their respective contributions to the present topic within very different historical and intellectual contexts, so that the comparison between their perspectives might appear illegitimate at first sight. Most of Keynes’s ideas were developed in the Treatise on Probability (published in 1921), in Keynes’s Lectures, 1932–1935 (1989), in the General Theory (Keynes, 1936) as well as in ‘The general theory of employment’ (Keynes, 1937), namely during the 1920s and the 1930s. By contrast, Hayek began his reflections on these subjects at the end of the 1930s, even if he...

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