Money, Investment and Consumption

Money, Investment and Consumption

Keynes’s Macroeconomics Rethought

Omar F. Hamouda

Contrary to the commonly perpetuated belief that Keynes’s theory is appropriate only to economic depressions, the author of this provocative book maintains that Keynes provided a complete set of macroeconomic relations and the ingredients of a new theoretical model, much more reflective of and analytically appropriate to the 21st century than those on which current macroeconomics is based.

Introduction

Omar F. Hamouda

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

Extract

For experience seems to show that people are divided between the old ones whom nothing will shift and are merely annoyed [sic., amazed, (sent letter of August 30, 1936, Keynes 1987, p. 85)] by my attempts to underline the points of transition so vital in my own progress, and the young ones who have not been properly brought up and believe nothing in particular. . . . I have no companions, it seems, in my own generation, either of my earliest teachers or of earliest pupils . . . (Keynes to Harrod, draft letter of August 27, 1936, cited by Clarke 1988, p. 259) Judging by any standard in economics, John Maynard Keynes was truly an exceptional, innovative scholar, who made a significant contribution to economics. His was a contribution not in the ordinary sense of adding a little here or transforming things a little there within the established corpus, contributions which luckily will be simply a footnote in the annals of knowledge. It was rather a contribution like those of Adam Smith, Ricardo, and Marx, which have in essence shaken the corpus, a contribution that will last. Whatever the merits of Keynes’s work, it transformed thinking in economics. Throughout his career as an economist, Keynes was above the crowd in his abilities to theorize, to shape the intellectual agenda, and even more astonishing, to be able to participate in a unique way in government decision-making in public affairs. One could reiterate that to be a good economist, one must be a good philosopher, historian, mathematician...