You are looking at 1 - 10 of 23 items

  • Author or Editor: Sheila Dow x
Clear All Modify Search
You do not have access to this content

Sheila Dow

You do not have access to this content

Sheila Dow

In looking to Keynes for guidance on modern policy issues, we identify some general principles which can be carried forward to the present day. In order to address problems arising from the domestic and international monetary systems, we focus on the principle of effective demand and the theory of liquidity preference, applied to analysis of a monetary production economy. Yet for Keynes theorising started and ended with context. The analytical process started with identifying the problem and looking to relevant theory for illumination. Yet it was crucial to consider the nature of the context in order to assess the validity of the assumptions and, if necessary, to change them. We therefore consider the differences in monetary systems between the 1930s–1940s and the present day in order to form a Keynesian view of monetary reform.

You do not have access to this content

Sheila Dow

Uncertainty, as unquantifiable risk, was central to Keynes’s philosophy and economics, and continues to be relevant under modern conditions. For Keynes, knowledge is in general uncertain because of the organic nature of the subject matter; quantifiable risk is the special case. He developed a theory of how in practice we can still establish grounds for belief under uncertainty, drawing on weight of argument and multiple strands of reasoning, such that uncertainty is a matter of degree. The degree of uncertainty influences fundamentally the key variable in Keynes’s theory of effective demand: planned investment. Further, money plays a crucial role as the refuge from uncertainty, such that the rate of interest is a monetary rate. Applied to modern institutions and conditions, this theory is shown to explain the recent crisis.

This content is available to you

Sheila Dow

The current situation offers great opportunities for Post Keynesians to offer a persuasive alternative to mainstream economics. This chapter explores these opportunities and the Post-Keynesian ideas of long standing for alternative theories and policies. The focus is put on two controversial issues which arise when considering the best route forward: the place, respectively, of mathematical modelling and pluralism. It is argued that Post-Keynesian modelling be considered as part of a pluralist methodology, as against dualism: the only-modelling and no-modelling positions. It is also argued that Post Keynesianism should be pursued, not only with a pluralist methodology, but also within a pluralist landscape alongside other schools of thought. This is quite compatible with Post Keynesians trying to persuade others that their approach is better than alternatives to understand reality.

You do not have access to this content

Sheila C. Dow

Monetary policy has gone through significant changes in the wake of the banking crisis that began in 2007, reverting to a more traditional form. Before the crisis, mainstream theory and the practice of monetary policy had been identified as converging on a ‘new consensus’, focused on the role of the interest rate in a neutral-money framework, with an independent central bank prioritizing the control of inflation. There were dissenting voices, notably post-Keynesians anticipating the crisis, focusing on the non-neutrality of money and considering a wider range of monetary policy instruments. The crisis itself forced central banks to consider a wider range of policy goals and to employ a wider range of instruments. Nevertheless a difference persists between the mainstream theoretical approach, which sees monetary policy being transmitted through its impact on expectations in asset markets and asset pricing, and the post-Keynesian approach, which focuses on the transmission through real social experience. We explore current issues for monetary policy in terms of goals and instruments, and the relationship between central banks and government. The chapter concludes by outlining unresolved issues for the future.

You do not have access to this content

Sheila C. Dow

You do not have access to this content

Keynes, Post Keynesians and methodology

Beyond Keynes, Volume Two

Sheila C. Dow

You do not have access to this content

Sheila C. Dow