Keynes, Uncertainty and the Global Economy

Keynes, Uncertainty and the Global Economy

Beyond Keynes, Volume Two

Edited by Shelia C. Dow

The revival of interest in Keynesian economics since the late 1980s reinstates the importance of Keynes’s contribution to economic theory and policy. This is the second of two volumes in which authoritative contributions are presented by an outstanding group of international experts to celebrate Keynesian economics, and to review and further the developments of post Keynesian economics of recent years.

Chapter 12: How do economic theorists use empirical evidence? Two case studies

Roger E. Backhouse

Subjects: economics and finance, post-keynesian economics


Roger E. Backhouse1 I THE PROBLEM The main objective of this chapter is to compare the role played by empirical evidence in Post Keynesian and mainstream economics. Given the methodological claims often made by Post Keynesian economics, one would expect to find significant differences. This objective is approached through an analysis of the way empirical evidence is used in two textbooks: Lectures on Macroeconomics, by Olivier Blanchard and Stanley Fischer (1989), and The Post Keynesian Approach to Economics, by Philip Arestis (1992). What these books have in common is that they are graduate-level texts on economic theory. As such, their main concern is with basic conceptual issues that affect the way economic phenomena are conceived: they are not concerned with phenomena relevant only to a specific time and place. Empirical evidence, therefore, is introduced only where it is considered relevant to more general conceptual issues. Thus Blanchard and Fischer (1989: xi) write that the goals of their book are (a) to present the conceptual framework and set of models ‘used and agreed upon by the large majority of macroeconomists’ and (b) to show the directions in which researchers are currently working. A further characteristic shared by the two books is that their authors are well known for their applied econometric research. One would expect them, therefore, to be well aware of the potential importance of empirical evidence and to use it wherever relevant. The background to this study is a broader concern with the role of...

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