Handbook on the History of Economic Analysis Volume II

Handbook on the History of Economic Analysis Volume II

Schools of Thought in Economics

Edited by Gilbert Faccarello and Heinz D. Kurz

Volume II contains entries on the major schools of economic thought and analysis. These schools differ with regard to their 'vision' of the working of the economic system, the major forces and interactions that shape its path, and the policy recommendations proposed. At any moment of time, several such schools typically compete with one another, striving for dominance within the economic and political discourse. Each Handbook can be read individually and acts as a self-contained volume in its own right. It can be purchased separately or as part of a three-volume set.

Chapter 31: Post-Keynesianism

Marc Lavoie

Subjects: economics and finance, history of economic thought

Extract

Post-Keynesian economics is a body of economic thought that developed since the mid-1950s, but of course its origins can be traced back to Keynes’s General Theory, and to the group of young economists, called the Circus, who discussed and criticized Keynes’s earlier Treatise on Money. Among the economists to be found in the first volume of this Handbook, post-Keynesian economics is primarily associated with the names of Keynes, Sraffa, Kalecki, Joan Robinson, Kahn, Kaldor and Minsky, but other influential figures, for very diverse reasons, could include Veblen, Fisher, Schumpeter, Lowe, Harrod, Lerner, Shackle, Hicks, Leontief and Simon. Up until the beginning of the 1970s, this dissident school of thought was mainly known as the neo-Keynesian school, but also as the Anglo-Italian school or the Cambridge school (of Keynesian economics). It became mostly known for its models of growth and distribution, the so-called Kaldor–Pasinetti models (Baranzini and Mirante 2013), which were an alternative to the neoclassical theory of income distribution based on marginal productivity theory. The main initial purpose of the school was to bring Keynes’s analysis into the realm of capital accumulation and the long period, as exemplified by Joan Robinson’s (1956) remarkable achievement. Then in the early 1970s, following letter exchanges between Alfred Eichner and Joan Robinson, the term post-Keynesian was put forward, a name that had been used occasionally before by both Nicholas Kaldor and Robinson. The name post-Keynesian stuck when Jan Kregel (1973) used it in the subtitle of his book summarizing the main views of Cambridge Keynesians, and when Eichner and Kregel (1975) used it in the title of their survey article for the Journal of Economic Literature. Finally, Paul Davidson and Sidney Weintraub created the Journal of Post Keynesian Economics in 1978, purposefully omitting the hyphen in an effort to go beyond the growth and distribution issues that had been at the heart of the Cambridge Keynesian work. Both spellings are still in use.

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