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Post Keynesian and Ecological Economics

Post Keynesian and Ecological Economics

Confronting Environmental Issues

Edited by Richard P.F. Holt, Steven Pressman and Clive L. Spash

It is argued that mainstream economics, with its present methodological approach, is limited in its ability to analyze and develop adequate public policy to deal with current environmental problems and sustainable development. This book provides an alternative approach. Building on the strengths and insights of Post Keynesian and ecological economics and incorporating cutting edge work in such areas as economic complexity, bounded rationality and socio-economic dynamics, the contributors to this book provide a trans-disciplinary approach to deal with a broad range of environmental concerns.

Chapter 7: Post Keynesian Consumer Choice Theory and Ecological Economics

Marc Lavoie

Subjects: economics and finance, environmental economics, post-keynesian economics, environment, environmental economics


Marc Lavoie INTRODUCTION Post Keynesian consumer theory arises from a multitude of influences, including those of socio-economists, psychologists, marketing specialists, and individuals such as Herbert Simon (1962, 1976) and GeorgescuRoegen, who are or were fully aware of the complexity of our environment, as well as the disparate clues that were left by the founders of Post Keynesian theory, clues that turn out to be surprisingly consistent with each other. Despite its apparent neglect, there exists a Post Keynesian theory of consumer choice, based on the indications left by the best-known and most productive Post Keynesian authors, such as Joan Robinson (1956, p. 251), Luigi Pasinetti (1981, p. 73), Edward Nell (1992, p. 396), Philip Arestis (1992, p. 124) and Bertram Schefold (1997, p. 327). These indications on consumer choice show a great degree of coherence, and in my opinion they fit tightly with the rest of Post Keynesian theory. The most detailed examination of a possible Post Keynesian consumer theory can be found in two books by Peter Earl (1983, 1986), and the motivations supplied above are quite apparent there. Other specific contributions to Post Keynesian consumer choice can be found in the works of Arrous (1978), Eichner (1987, Chapter 9), Drakopoulos (1990, 1992, 1994) and Lavoie (1992, Chapter 2), where a substantial amount of overlap with Earl’s initial attempt at defining a specific Post Keynesian consumer choice vision is obvious. A neat, earlier exposition of a post-Keynesian consumer choice theory can be found in the recently translated work of...

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