Keynes’s General Theory for Today

Keynes’s General Theory for Today

Contemporary Perspectives

Edited by Jesper Jespersen and Mogens Ove Madsen

The themes of this important new volume were chosen to mark the 75th anniversary of the publication of The General Theory of Employment, Interest and Money. The distinguished authors concentrate on the relevance of this seminal publication for macroeconomic theory, method and the politics of today. This is particularly pertinent as similarities with the 1930s are striking in terms of unemployment, low growth, financial fragility and the European monetary union resembling the gold standard.

Chapter 2: The final death and next life of Maynard Keynes

James Galbraith

Subjects: economics and finance, history of economic thought, post-keynesian economics

Extract

Back in 2009, you may recall, the economics profession enjoyed a moment of ferment. Economists who had built their careers on inflation targeting, rational expectations, representative agents, the efficient markets hypothesis, dynamic-stochastic-general-equilibrium models, the virtues of deregulation and privatization and the Great Moderation were forced by events momentarily to shut up. The fact that they had been absurdly, conspicuously and even in some cases admittedly wrong even imposed a little humility on a few. One senior American legal policy intellectual – a fellow-traveller of the Chicago School – announced his conversion to Keynesianism as though it were news.

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