Post Keynesian Econometrics, Microeconomics and the Theory of the Firm

Post Keynesian Econometrics, Microeconomics and the Theory of the Firm

Beyond Keynes, Volume One

Edited by Shelia C. Dow and John Hillard

This is the first of two volumes celebrating Keynes’s contribution to economics, and the development of post Keynesian economics in recent years. It reinstates the importance of Keynesian economics and its revival since the end of the 1980s, and the book’s authoritative chapters are presented by an outstanding group of international contributors.

Chapter 2: Keyne's 'microeconomics': some lessons

Piero V. Mini

Subjects: economics and finance, econometrics, post-keynesian economics


2. Keynes’s ‘microeconomics’: some lessons Piero V. Mini The well-worn paths are easy to follow and lead into good company. Advance along them visibly furthers the accredited work which the science has in hand. Divergence from the paths means tentative work, which is necessarily slow and fragmentary and of uncertain value. (Veblen, [1898]1961: 79) I REASON AND UNCERTAINTY In 1933 Keynes observed that ‘Albert and the blond beasts make up the world between them. If either cast the other out, life is diminished in its force’ (CW XXVIII: 22). Einstein and the Nazis, reason and passion are the warp and the woof of history. The juxtaposition of reason and passion in the short essay on Einstein is no passing observation of Keynes. It is the theme of the General Theory where we read that often ‘human decisions affecting the future, whether personal or political or economic, cannot depend on a strict mathematical expectation, since the basis for making such calculations does not exist’. We calculate ‘where we can’, but where we cannot we are fortunate to be able to depend on ‘other motives’ – other, that is, than a mathematical calculation of costs and returns. We depend on our ‘innate urge to activity’, on our ‘sanguine temperament’, on our ‘whim or sentiment or chance’, on our sense of ‘satisfaction (profit apart)’ in doing something, on our ‘innate optimism’, on the ‘pleasure’ we derive in outwitting ‘gulls’ and professionals alike, on the ‘nerves and hysterias’, on ‘our spontaneous...

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