Post Keynesian Macroeconomic Theory: A Foundation for Successful Economic Policies for the Twenty-First Century

by Paul Davidson

Working from Keynes’s revolutionary analysis of a money-using entrepreneurial economy, this important new book presents a real world alternative to the basic macroeconomic analytical model. In Post Keynesian Macroeconomic Theory, Paul Davidson addresses the limitations of conventional mainstream New Classical and New Keynesian analysis for developing successful economic policies. Important features of this book include an aggregate supply and demand analysis that does not rely on aggregate supply imperfections, such as inflexible wages and prices or co-ordination failures, to demonstrate the existence of involuntary unemployment; the application of Keynes’s original 1936 closed economy analysis to an open economy engaged in significant international trade in order to resolve international balance of payments problems; and the argument that both old and new Keynesian analytical models were logically incompatible to Keynes’s analysis, and so led to unsuccessful policies.Students are encouraged to return to the path of Keynes’s analysis which can be applied to understand real world economic problems and to design policies to resolve them. Unlike other textbooks, Post Keynesian Macroeconomic Theory challenges the orthodoxy, providing students of economics with a useful analytical framework as well as a clear understanding of how and why mainstream economics has gone wrong.

Genres: Economics

320 pages, Paperback

First published January 1, 1994

About the author

Librarian Note: There is more than one author in the GoodReads database with this name. See this thread for more information.

Davidson did not originally choose economics as a profession. His primary training was in chemistry, for which he got a BSc from the University of Pennsylvania. In 1951 he worked in that same university as an instructor in physiology and chemistry. He soon switched to economics, receiving his MBA from the City University of New York in 1955, and completing his PhD at the University of Pennsylvania in 1959.

He has taught economics at University of Pennsylvania, Rutgers University, Bristol University, University of Cambridge, and the University of Tennessee. He is a Visiting Scholar at the Schwartz Center For Economic Policy Analysis at the New School for Social Research and is currently an Emeritus Holly Professor of Excellence at the University of Tennessee, Knoxville. He is especially known for promoting a Post Keynesian school of macroeconomics. He and Sidney Weintraub founded the Journal of Post Keynesian Economics in 1978. He is the Editor of the Journal of Post Keynesian Economics.

Reviews

[Monzenn]

High four stars. I wish more people read books in this genre, i.e., alternative economic theory. The mainline economic theories are great and all but the direction they imply is that they explain real-world events, when in reality it's more like they build suitable working models, and if they explain real-world phenomena, then great. It's a perspective that is similar to abstract mathematics, so I really can't hate the game.

Anyway. Davidson does make a compelling case about what Keynes meant about his general theory. Keynesian and New Keynesian economics do share the same axioms with classical economics, i.e., the neutral or predictable role of money and time. I've been a bit weirded out about this, especially coming from a financial markets background where money and time play their own roles, and my interest is piqued by this reexamination of Keynes. I am aware that Keynes has been successful in the financial markets, so I wouldn't be surprised if his theories worked just as well.

Admittedly, it is my own weakness that causes me to drop this by a star. The theory is indeed laid out in full here, meaning all that symbolic and charting goodness. And I am at that point that I could neither confirm nor deny the truth of these parts. As the book presents itself to be a rigorous narrative, I can only judge it the way I judge books from a genre that are out of my depth: say my piece, but acknowledge my limitations directly through the star rating.

Nonetheless, I would be ecstatic to recommend this to anyone who has doubts about mainstream economic theory, or honestly, anyone who has an interest in the subject. Of course, it would be great if they were conversant in the charts and the symbols. (Maybe I should get a copy of the more accessible Davidson works....)