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Contemporary Post Keynesian Analysis

Edited by L. Randall Wray and Mathew Forstater

Original articles by leading scholars of post Keynesian economics make up this authoritative collection. Current topics of the greatest interest are covered, such as: perspectives on current economic policy; post Keynesian approaches to monetary theory and policy; economic development, growth and inflation; Kaleckian perspectives on distribution; economic methodology; and history of heterodox economic theory. The contributors explore a variety of prevailing issues including: wage bargaining and monetary policy in the EMU; the meaning of money in the internet age; stability conditions for small open economies; and economic policies of sustainable development in countries transitioning to a market economy. Other enduring matters are examined through the lens of economic theorists – Kaleckian dynamics and evolutionary life cycles; a comparison between Keynes’s and Hayek’s economic theories; and an analysis of the power of the firm based on the work of Joan Robinson, to name a few.
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Chapter 18: From Say’s Law to Keynes, from Keynes to Walras’s Law: Some Ironies in the History of Economic Thought

Antonio Carlos Macedo e Silva


Antonio Carlos Macedo e Silva1 Produce, supply, sell, buy: the inflection of a few verbs is sufficient to express the essential phenomena of a mercantile economy. This simplicity is, however, illusory. Even though these actions are carried out self-confidently by individuals, the conjugation of the verbs, in the discourse of economists, is far from being a trivial task. Impasses and controversies surround issues which can only be deemed basic. There is, for instance, an insuperable disagreement regarding the definition of the essential properties of a mercantile economy. Mercantile, and therefore monetary, according to Marxists, Institutionalists and post Keynesians (monetary and therefore non-ergodic, the latter would add; see Davidson, 1982). Nevertheless, the hegemonic tradition intrepidly proceeds, clinging to the conception of the mercantile economy as being essentially an economy of direct exchanges (see, for instance, the assessment by Hahn, 1982). The law of markets is one of the recurrent themes in economic debate. Over the past decades, a large number of interpreters have sought to establish the ‘final truth’ regarding it. The debate carried out by the mainstream proceeded, essentially, to rehabilitate the law, exempting it from the criticism of Keynes. In Schumpeter (1954), it becomes a precursor of Keynesian macroeconomics. In Becker and Baumol (1952/60) it coincides with the notion, essential to the neoclassical synthesis, of the existence of a price level compatible with general equilibrium. It is ‘the beginning of sound thinking in macroeconomics’, for Blaug (1962, p. 149) and, in the opinion of Clower...

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