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 7: When Keynes and Minsky meet Mandelbrot . . .

Stefan Voss

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


Since the Financial Crisis (2007/09) the relevance of ‘uncertainty’ has increased significantly. The Black Swan (Taleb 2010) became synonymous with ‘uncertainty’ in economic discussion. Uncertainty is a fact in our economic life. And some managers also argue that uncertainty has become more important in terms of making decisions for a company. ‘We have to anticipate that more uncertainty will occur and this will happen permanently . . . The world economy has become more complex and more unclear; there are to consider more risks . . . Everything is in terconnected, especially financial flows . . . Reason and effect are not so easy to disentangle.’1 However, mainstream economics still denies the role of uncertainty even though it is an obvious fact. New-Keynesians describe uncertainty just as ‘asymmetric information’ but do not agree that uncer tainty plays an autonomous role in economy. If these asymmetries were to be reduced or abol ished, uncertainty would be minimized and would have no impact on the economy. Only minor economic theories, the Austrian School and the post-Keynesian School have implemen ted uncertainty in their models. Uncertainty plays a significant role in these theories; even though it leads to quite different views and consequences.

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