Edited by Jesper Jespersen and Mogens Ove Madsen
Chapter 8: Teaching macroeconomics: seeking inspiration from Paul Davidson
As it is known from the history of economic thought, Post Keynesianism is heterodox in so far that, according to Arestis (1996), it consists of at least three main traditions (a Keynes-like, a Kaleckian and an Institutional one). However, Post Keynesianism is in many ways fundamentally linked to the writings of John Maynard Keynes; for example, Eichner and Kregel (1975) and Chick (1995). Primarily it has to do with the kind of economic understanding that Keynes presented in his A Treatise on Probability, published in 1921, and in his seminal work The General Theory of Employment, Interest and Money from 1936. One of the most prominent economists within the Keynes-like tradition of Post Keynesianism is Paul Davidson. Throughout almost all of his writings, Davidson has repeatedly argued that to understand the relevant economic processes of a modern monetary entrepreneurial macro economy you have to acknowledge and to take into account the fundamental conclusions of Keynes. Based on this understanding, theoretically as well as methodologically, he has rightfully criticized neoclassical thinking, which is basically the theoretical foundation behind much of the modern macroeconomic mainstream, for its lack of relevance to conduct a thoroughly macroeconomic analysis. However, he has done more than just criticize the mainstream. He has also tried to put forward, from the very beginning of his career, some alternative and opposing views to the mainstream understanding.
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