Teaching Post Keynesian Economics

Teaching Post Keynesian Economics

Edited by Jesper Jespersen and Mogens Ove Madsen

This book contends that post Keynesian economics has its own methodological and didactic basis, and its realistic analysis is much-needed in the current economic and financial crisis. At a time when the original message of Keynes’ General Theory is no longer present in the most university syllabuses, this book celebrates the uniqueness of teaching post Keynesian economics, providing comparisons with traditional economic rationale and illustrating the advantages of post Keynesian pedagogy.

Chapter 4: Teaching open-system economics

Sheila Dow

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

Extract

The urgency of the need to address the financial and economic crisis which began in 2007 has encouraged public discussion of Keynesian theory and policy. The focus has almost exclusively been on Keynes’s views on the role of fiscal policy in addressing deficient aggregate demand. Given the inattention in the mainstream literature in recent decades to fiscal policy, and even more to Keynes, this is a remarkable development. It is to be hoped that the economics curriculum adapts in order to introduce students to Keynes and Keynesian policy. But this renewed interest in Keynes is very selective, being confined to what Coddington (1976) characterised as ‘hydraulic Keynesianism’. This approach was contrasted with what he called ‘fundamentalist Keynesianism’, which drew much more extensively on Keynes’s work and particularly on his views on uncertainty, within his theory of knowledge. Many Keynesians in the ‘fundamentalist’ mould have drawn attention to the wider importance of Keynes’s theory of knowledge, not only in order to explain the crisis, but also to suggest policy solutions (for example, Skidelsky 2009). But this wider focus on Keynes has not penetrated the mainstream discourse, with the notable exception of Stiglitz (2010), who addressed it only to dismiss it.

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