Post-Keynesian Economics

Post-Keynesian Economics

New Foundations

Marc Lavoie

The book is a considerably extended and fully revamped edition of the highly successful and frequently cited Foundations of Post-Keynesian Economic Analysis, published in 1992. It provides an exhaustive account of post-Keynesian economics and of the developments that have occurred in post-Keynesian theory and in the world economy over the last twenty years. Topics covered include open-economy issues, the methodological foundations of heterodox economics, consumer theory, firms and pricing, money and credit, effective demand and employment, inflation theory, and growth theories.

Chapter 2: Theory of the choice

Marc Lavoie

Subjects: economics and finance, post-keynesian economics


The objective of this chapter is to present how economic agents take their decisions in a post-Keynesian world. Since most of these decisions are set within a world of uncertainty, a concept that post-Keynesians have been keen to underline, the notion of uncertainty will be defined with care. Furthermore, although post-Keynesians have an organic view of the world, we shall pay a great deal of attention to the rationality underlying the actions of economic agents. Finally we shall deal with the much-neglected issue of consumer choice, about which we shall discover that, somewhat surprisingly, post-Keynesians hold a common view.

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