PKT: Caveat Emptor
Chasna1
>In contrast Milton Friedman, the most aggressive of the
>monetarists, has argued the exogeneiry of money by comparing its
>availability to something dropped from a helicopter. "<
Just another reason why the so-called "Post-Keynesians" will never be
considered as serious players in the intellectual development of economics.
Keynesian's have always loved to play the role of the "bad-boys" on the block,
i.e., misquoting and misrepresenting at whim the works and words of those they
consider to be the enemies of government controlled markets.
The PKTers, however, are a maverick group of Radical-Keynesian types comprised
mainly of individuals from outside the economic community and, in general,
hostile to economics and economists. Essentially this group is comprised of
ragtagged Marxists who have tried to rehabilitate themselves on an extreme and
radical interpretation of the GT by Keynes.
The fact that L Randall Wray would toss a non sequitur as the "helicopter"
statement as representative of Friedman's formal doctrine should be of no
surprise to anyone familiar with the tactics of this group.
Buying beware of this group.
Chas
William F. Hummel
In one simple post, Chas Anderson discloses for all to see his
hatred of anything with a Keynesian label, and attempts to
denigrate Post Keynesians with a Ragtag Marxists label. Any
economist worth the name would make his case in logical terms,
not through epithets. Even Milton Friedman does not stoop to
that level.
William F Hummel
JOHN J WEATHERBY
Keynesians and Neo-Keynesians. I have heard many good economist refered to
as Neo-Keynesians. ie. Greg Mankiw, Alwyn, Young, Cooper, John, John Taylor
etc. I hardly believe these guys would be called bad boy reactionaries. They
have good sound theoritical work.
So the question is just who are you refering to?
BTW I really don't believe RBC or Neo-Keynesian have solved the business
cycle. I am really more inclined to Neo-Schumpterian views such as the
Schell paper.
Chasna1
Neo-Keynesians are more Neo-Classical in that they accept Keynes's position
that at or near full-employment the Classical assumptions hold. Post-Keynesians
are more radical in that they not only reject Keynes's position of the special
"Classical case, but almost all the basic assumptions of economics.
This latter group is comprised mostly of individuals basically hostile to
economics and economists and so their literature, if one can call it that, is
essentially polemical in nature.
In academia, Post-Keynesian Thought has a bad reputation because of the unfair
and inaccurate nature of their polemics and is, therefore, not highly thought
of and largely rejected by the mainstream.
Neo-Keynesians, on the other hand, have unfortunately made great headway into
Academia due to the rigor they have subjected their theories to. Rather than a
polemical approach, such as the PKTers or traditional Marxist, they have taken
a positive approach and, as a result, have taken over the textbook industry
and, therefore, the classroom. Even modern Classicals have adopted many tenets
of the Neo-Keynesians in their teachings and writings.
For example, I have used Mankiw, macro and micro, for years on both the
intermediate and principles' level and have found them well received by
students. Taylor also has some of the finest texts on the market and his micro
principles in probably the best available.
As for PKT, it's another story. Even the few instructors that I know who are
sympathetic to this school will never use nor teach this brand of thinking in
their classes. What techer is willing to subject himself to ridicule when he
proclaims there is no link between money and inflation, the money supply can be
neither measured nor estimated, all money, if, in fact, there is such a thing,
is endogenous, the supply of money is perfectly elastic at some inexplicably
determined level of interest, fiscal multipliers are enormous and debt and
deficits are good for an economy. No, don't look for any great reception for
these types of counter-intuitive claims on the part of even the most radical
instructors.
SUSUPPLY
> I have some confusion here. Is there a difference between Post
>Keynesians and Neo-Keynesians.
You can look it up, as Yogi tells us, at:
Patrick
Robert Vienneau
> I have some confusion here. Is there a difference between Post
> Keynesians and Neo-Keynesians. I have heard many good economist refered to
> as Neo-Keynesians. ie. Greg Mankiw, Alwyn, Young, Cooper, John, John Taylor
> etc. I hardly believe these guys would be called bad boy reactionaries. They
> have good sound theoritical work.
> So the question is just who are you refering to?
Mr. Weatherby,
I believe that the economists you are describing are frequently
referred to as "New Keynesian." They could just as well be called
"New Pigovian," as far as I am concerned.
This question has come up just recently, around 11 March 1999.
o Examples of Neo-Keynesians:
Lawrence Klein, Paul Samuelson, Robert Solow, James Tobin
o A random selection of Post Keynesians:
Paul Davidson, Alfred Eichner, Richard Goodwin, Nicholas Kaldor,
Michal Kalecki, Jan Kregel, Luigi Pasinetti, Piero Sraffa,
Joan Robinson, G. L. S. Shackle, Sidney Weintraub
Some themes in Post Keynesian economics include:
o The importance of uncertainty, historical time, or non-ergodicity
(as opposed to risk, logical time, and ergodic processes)
o The idea that money matters in all runs
o A rejection of Walrasian models
There are divisions within Post Keynesian economics, e.g. between American
Post Keynesians such as Davidson and the Cambridge (England) - Italian
branch. I believe William Hummel may have given the following URL on
the last go-around on this subject:
<http://csf.colorado.edu/pkt/info/links.html>
Another important group of economics drawing inspiration from Keynes is
Robert Clower and Axel Leijonhufvud
They share the Post Keynesian belief that what many call Keynesianism is,
in fact, a reaction *against* the economics of Keynes. There is debate
among Post Keynesians about how well Clower's dual-decision model
captures Keynes' ideas.
Labels vary in context. What I am calling Neo-Keynesian has sometimes
been called "Old Keynesian," to distinguish these economists from your
supposed "New Keynesians." I have seen the Cambridge-Italian branch, circa
1960, referred to as "Neo-Keynesian." On the third hand, sometimes both
my Neo-Keynesians and their more Keynes-based critics have been referred
to as post-Keynesian, since they come after 1936.
A complete understanding of Post Keynesian economics might also study
its relation to American Institutionalism, as following on Thorstein
Veblen, John R. Commons, Wesley Clair Mitchell, John Maurice Clark,
Clarence Ayres, Gunnar Myrdal (not-an-American), and John Kenneth
Galbraith (who towered head and shoulders over many another economist).
By the way, I am not professionally trained in economist. Even so,
I find Post Keynesian critiques of neoclassical economics compelling,
especially the Sraffian or Neo-Ricardian production-based critique.
--
Robert Vienneau
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n o Whether strength of body or of mind, or wisdom,
@ c or virtue, are always found...in proportion to
d . the power or wealth of a man [is] a question
r e fit perhaps to be discussed by slaves in the
e p hearing of their masters, but highly unbecoming
a a to reasonable and free men in search of the
m c truth.
s -- Rousseau
William F. Hummel
>
>Neo-Keynesians are more Neo-Classical in that they accept Keynes's position
>that at or near full-employment the Classical assumptions hold. Post-Keynesians
>are more radical in that they not only reject Keynes's position of the special
>"Classical case, but almost all the basic assumptions of economics.
>
>This latter group is comprised mostly of individuals basically hostile to
>economics and economists and so their literature, if one can call it that, is
>essentially polemical in nature.
Observant readers will note that Chas Anderson is hopelessly
hostile to Keynesian economics, and particularly what has become
known as Post Keynesian (macro)economics. His assertion that PKs
reject "almost all basic assumptions of economics" should make
that obvious. Anderson would have us believe that macroeconomics
is a discipline with well-established principles that are widely
accepted by the real economists. Of course anyone familiar with
academia knows that economists are a singularly non-homogeneous
group with respect to their basic assumptions. They all do math
the same way, but what they treat as endogenous vs exogenous
variables in their math models and their functional relationships
is a constant battlefield.
>In academia, Post-Keynesian Thought has a bad reputation because of the unfair
>and inaccurate nature of their polemics and is, therefore, not highly thought
>of and largely rejected by the mainstream.
Call it "polemics" and "not highly thought of" if you disagree.
Otherwise call it "mainstream." How pathetic!
>
>Neo-Keynesians, on the other hand, have unfortunately made great headway into
>Academia due to the rigor they have subjected their theories to. Rather than a
>polemical approach, such as the PKTers or traditional Marxist, they have taken
>a positive approach and, as a result, have taken over the textbook industry
>and, therefore, the classroom. Even modern Classicals have adopted many tenets
>of the Neo-Keynesians in their teachings and writings.
The attempt to be "rigorous" sometimes leads to models that are
mathematically tractable but hopelessly unreal. Witness the
rational expectations fad that is now largely discounted in the
profession. Lucas, a founder of the New Classical school, agreed
that the axioms required in the New Classical economics made the
analysis 'artificial, abstract, and patently unreal' but insisted
these postulates were necessary because they embodied the _only_
scientific method of doing economics.
PKs believe that the old Keynesians (e.g. Hicks, Samuelson,
Tobin) who had been trained in the classical economics tradition
did not fully grasp Keynes's theory of unemployment. They
unintentionally aborted Keynes's revolution when they claimed to
have developed the analytical model to his general system which
they promoted in journals and texts.
Keynes always insisted that it is the conditions underlying
demand and not supply that are the fundamental cause of
unemployment in a monetary economy. The classical postulates
that Keynes rejected are (a) the axiom of the neutrality of
money, (b) the gross substitution axiom, and (c) the ergodic
axiom. In other words, money is not just an intermediary in the
transfer of goods, it is also one of the factors of production;
money cannot be produced as labor produces goods; and the future
cannot be predicted from the experience of the past.
New Keynesians have attempted to patch some of the shortcomings
of the old Keynesians theories, but are still following some of
the same foundations of classical theory that Keynes rejected.
>For example, I have used Mankiw, macro and micro, for years on both the
>intermediate and principles' level and have found them well received by
>students. Taylor also has some of the finest texts on the market and his micro
>principles in probably the best available.
>
>As for PKT, it's another story. Even the few instructors that I know who are
>sympathetic to this school will never use nor teach this brand of thinking in
>their classes. What teacher is willing to subject himself to ridicule when he
>proclaims there is no link between money and inflation, the money supply can be
>neither measured nor estimated, all money, if, in fact, there is such a thing,
>is endogenous, the supply of money is perfectly elastic at some inexplicably
>determined level of interest, fiscal multipliers are enormous and debt and
>deficits are good for an economy. No, don't look for any great reception for
>these types of counter-intuitive claims on the part of even the most radical
>instructors.
In the above paragraph, Anderson unwittingly describes what is
wrong with much of mainstream economics: teach what is generally
believed, whether it is true or not. Each generation of academic
economists perpetuates some of the false concepts of previous
generations, often because it is the path of least resistance.
Undergraduates are taught much that is known to be outdated,
oversimplified, and in some cases misleading to false. PKs are
considered heterodox economists and are not welcome in that
environment. Nevertheless Post Keynesian economics is alive and
well.
For those who would like to learn more about PK, read "Post
Keynesian Macroeconomic Theory, A Foundation for Successful
Economic Policies in the Twenty-first Century" by Paul Davidson,
1994, ISBN 1852788364 (paperback edition). Davidson is a
professor at the University of Tennessee.
William F Hummel
Chasna1
>Tobin) who had been trained in the classical economics tradition
>did not fully grasp Keynes's theory of unemployment. They
>unintentionally aborted Keynes's revolution when they claimed to
>have developed the analytical model to his general system which
>they promoted in journals and texts.
By the way, are you claiming to have an understanding of the GT by Keynes? I
never knew you were claiming to have ever even read it? If your opinions about
Keynes and others are still untainted by having ever read any of them, then you
should state so.
>The classical postulates
>that Keynes rejected are (a) the axiom of the neutrality of
>money, (b) the gross substitution axiom, and (c) the ergodic
>axiom. In other words, money is not just an intermediary in the
>transfer of goods, it is also one of the factors of production;
>money cannot be produced as labor produces goods; and the future
>cannot be predicted from the experience of the past.
>
Now here a little bit of real nonsense. Name a classical economist who said
money was neutral? Then, please validate your claim that Keynes ever said money
was absolutely non-neutral?
>>(b) the gross substitution axiom, and (c) the ergodic
>axiom.<<<
??????????
>> In other words, money is not just an intermediary in the
>transfer of goods, it is also one of the factors of production;
>money cannot be produced as labor produces goods; and the future
>cannot be predicted from the experience of the past.<<<<<<<
?????????????????????????
>>>Of course anyone familiar with
academia knows that economists are a singularly non-homogeneous
group with respect to their basic assumptions.<<<<<<<<
>>>>>>>In the above paragraph, Anderson unwittingly describes what is
wrong with much of mainstream economics: teach what is generally
believed, whether it is true or not. Each generation of academic
economists perpetuates some of the false concepts of previous
generations, often because it is the path of least resistance.
Undergraduates are taught much that is known to be outdated,
oversimplified, and in some cases misleading to false. >>>>>>>>>>>>>>>>
>>>>>>For those who would like to learn more about PK, read "Post
Keynesian Macroeconomic Theory, A Foundation for Successful
Economic Policies in the Twenty-first Century" by Paul Davidson,<<<<<<<<<
>>William F Hummel<<<<<
Have you ever read it? Have you ever read anything by Keynes?
Robert Vienneau
cha...@aol.com (Chasna1) wrote:
> >The classical postulates
> >that Keynes rejected are (a) the axiom of the neutrality of
> >money, (b) the gross substitution axiom, and (c) the ergodic
> >axiom. In other words, money is not just an intermediary in the
> >transfer of goods, it is also one of the factors of production;
> >money cannot be produced as labor produces goods; and the future
> >cannot be predicted from the experience of the past.
> Now here a little bit of real nonsense. Name a classical economist who said
> money was neutral?
In the long run? I take "classical" above to be as Keynes used it, e.g.
to include economists I would call neoclassical. I assume Charles is
well aware of objections to that use. If he wants to go further back,
I would appreciate an exposition of the points of contention between
the currency and banking schools.
"But, whatever the state of society, there is a certain volume of
their resources which people of different classes, taken one with
another, care to keep in the form of currency; and if everything
else remains the same, then there is this direct relation between
the volume of currency and the level of prices, that if one is
increased by 10 per cent, the other will also be increased by 10
per cent. Of course, the less the proportion of their resources
which people care to keep in the form of currency, the lower will
be the aggregate value of the currency, that is, the higher will
be prices with a given volume of currency.
This relation between the volume of the currency and the general
level of prices may be changed permanently by changes, firstly
in population and wealth, which change the aggregate income;
secondly, by the growth of credit agencies, which substitute
other means of payment for currency; thirdly, by changes in the
methods of transport, production, and business generally,
which affect the number of hands through which commodities
pass in the process of making and dealing, and it may be
temporarily modified by fluctuations of general commercial
confidence and activity...[several pages]...
If an inconvertible currency is controlled by a strong government,
its amount can be so regulated that the value of a unit of it is
maintained at a fixed level...'Convertible' notes - that is, notes
for which gold (or other standard metallic) currency will *certainly*
be given in exchange on demand - exert nearly the same influence on
national price levels, as would be exerted by standard coins of
equal nominal value. Of course, if even a small doubt arises as to
their full convertibility into standard coins, men will be shy in
regard to them; and if they cease to be fully convertible they will
fall in value below the amounts of gold (or silver) which they
profess to represent.
It will be noted that this chapter is concerned with the demand for
currency only when general credit is in a normal condition. When
credit is shaken, it may be advisable to adopt abnormal, and (so to
speak) medicinal measures in regard to the supply of currency."
-- Alfred Marshall, "The Total Currency Needed by a Country,"
Excerpt from _Money, Credit and Commerce_, Macmillan, Ch. 4,
1924. (Reprinted in _Monetary Theory: Selected Readings_,
edited by Robert W. Clower, Penguin, 1969.)
"But now an imprtant distinction must be drawn. The *institution*
of money is, as we have seen, a powerful instrument promoting
wealth and welfare. But the *number of units of money* embodied
in that instrument is, in general, of no significance. It is all
one whether the garment, or the veil, is thick or thin. I do not
mean, of course, that it is immaterial whether the number of units
of money is held constant, or is variable in one manner, or is
variable in another manner in relation to other economic
happenings. I mean that if, other things being equal, over a
series of months or years the stock of money contains successively
m x1, m x2, m x3, ... units, it makes no difference what the value
of m is. A doubled value of m throughout means simply doubled
prices throughout of every type of goods - subject, of course, to
the rate of interest not being reckoned for this purpose as a
price - and all real happenings are exactly what they would have
been with a value of m half as large...Money then, let us say, is
a key, by means of which productive energies that would otherwise
have been imprisoned, can be released; but, provided only it fits
the lock, it is of no significance whether the key contains a great
deal of metal or very little.
So far everything is clear. If then we were confronted in the actual
world with the steadily rotating state, inaptly called stationary,
of economic fiction, there would be no further question to ask and
nothing more to say. But the fact of change destroys this convenient
simplicity. The economic body alters, and the veil that shrouds,
or the garment that enwraps it, alters also. How are these alterations
related? ...it might be argued, all changes which occur in the money
garment result from changes initiated in the body, and these changes
which occur in the garment do not react in any way on the body; just
as if the number of persons travelling in a railway train were
recorded by an enterprising spy, the record would be a mere
epiphenomenon. The similes of the garment, the veil and the wrapper
suggest that this is in fact so. But the suggestion is wrong. Many
important changes that occur in the garment are, indeed, effects of
changes initiated in the body. But, in general, these in turn
react in a greater or less degree on the state of the body. *What*
changes in the garment result from given changes initiated in the
body and what reactions they, or the lack of them, in turn produce
depends on how the garment is constructed. Besides these induced
changes that occur in the garment there are, or may be, other
changes that autonomous, originating in the garment itself. These
too have effects on the body. What they are and what their effects
again depends on how the garment is constructed."
-- A. C. Pigou, "Money, A Veil?" Excerpt from _The Veil of
Money_, Macmillan, 1941. (Reprinted in _Monetary Theory:
Selected Readings_, edited by Robert W. Clower, Penguin, 1969.)
I haven't fully read the readings selected by Clower from Marshall
and Pigou. I take Marshall and Pigou as both asserting that money is
neutral in the long run. They do not assert that money is neutral in
the short run. In fact, Pigou says that money can cause short run
fluctuations.
> Then, please validate your claim that Keynes ever said money
> was absolutely non-neutral?
"If we suppose a state of expectation to continue for a sufficient
length of time for the effect on employment to have worked itself
out so completely that there is, broadly speaking, no piece of
employment going on which would not have taken place if the new
state of expectation had always existed, the steady level of
employment thus attained may be called the long-period employment
[footnote 1] corresponding to that state of expectation.
[footnote 1] It is not necessary that the level of long-period
employment should be *constant*, i.e. long-period conditions
are not necessarily static. For example, a steady increase in
wealth or population may consititue a part of the unchanging
expectation. The only condition is that the existing expectations
should have been foreseen sufficiently far ahead.
It follows that, although expectation may change so frequently that
the actual level of employment has never had time to reach the
long-period employment corresponding to the existing state of
expectation, nevertheless every state of expectation has its
definite corresponding level of long-period employment."
-- J. M. Keynes, _The General Theory of Employment Interest
and Money_, (Chapter 5, Expectation as Determining Output
and Employment), p. 48.
Notice that the level of long-period employment is not unique, but
is a function of expectations.
"Nevertheless, we must not forget that, in the case of durable
goods, the producer's short-term expectations are based on the
current long-term expectations of the investor; and it is of the
nature of long-term expectations that they cannot be checked
at short intervals in the light of realized results. Moreover,
as we shall see in Chapter 12, where we shall consider long-term
expectations in more detail, they are liable to sudden revision.
Thus the factor of current long-term expectations cannot be even
approximately eliminated or replaced by realised results."
-- J. M. Keynes, _The General Theory of Employment Interest
and Money_, (Chapter 5, Expectation as Determining Output
and Employment), p. 51.
So much for rational expectations.
What is Chapter 12, "The State of Long-Term Expectation," about?
Uncertainty (as distinguished from risk), conventions, the stock
market as an institution for making investments which are
fixed for the community liquid for the individual, an analogy to
a beauty contest, speculation, enterprise, instability, and animal
spirits. In a word, money.
Next question?
> >>(b) the gross substitution axiom, and (c) the ergodic
> >axiom.<<<
> ??????????
"Finally, there was an even more interesting third assumption
implicit and explicit in the classical mind. It was a belief in
unique long-run equilibrium independent of initial conditions. I
shall call it the 'ergodic hypothesis' by analogy to the use of
this term in statistical mechanics. Remember that the classical
economists were fatalists (a synonym for 'believers in
equilibrium'!). Harriet Martineau, who made fairy tales out of
economics (unlike modern economists who make economics out of
fairy tales), believed that if the state redivided income each
morning, by night the rich would again be sleeping in their
comfortable beds and the poor under the bridges. (I think she
thought this a cogent argument against equilitarian taxes.)
Now, Paul Samuelson, aged 20 a hundred years later, was not
Harriet Martineau or even David Ricardo; but as an equilibrium
theorist he naturally tended to think of models in which things
settle down to a unique position independently of initial conditions.
Technically speaking, we theorists hoped not to introduce
*hystersis* phenomena into our model, as the Bible does when it
says, 'We pass this way only once' and, in so saying, takes the
subject out of the realm of science into the realm of genuine
history."
-- Paul A. Samuelson, "What Classical and Neo-Classical Monetary
Theory Really Was," _Canadian Journal of Economics_, V 1.,
# 1, pp. 1-15, 1968. (Reprinted in _Monetary Theory: Selected
Readings_, edited by Robert W. Clower, Penguin, 1969.)
mas...@ix.netcom.com
---snip---
>For example, I have used Mankiw, macro and micro, for years on both the
>intermediate and principles' level and have found them well received by
>students. Taylor also has some of the finest texts on the market and his micro
>principles in probably the best available.
>
>As for PKT, it's another story. Even the few instructors that I know who are
>sympathetic to this school will never use nor teach this brand of thinking in
>their classes. What teacher is willing to subject himself to ridicule when he
>proclaims there is no link between money and inflation, the money supply can be
>neither measured nor estimated, all money, if, in fact, there is such a thing,
>is endogenous, the supply of money is perfectly elastic at some inexplicably
>determined level of interest, fiscal multipliers are enormous and debt and
>deficits are good for an economy. No, don't look for any great reception for
>these types of counter-intuitive claims on the part of even the most radical
>instructors.
It would be helpful in judging the weight to be attached if Charles Anderson
would give us briefly his CV and where he now teaches.
Mason C
Mark Patrick Witte
William F. Hummel <wfhu...@mediaone.net> wrote:
>The attempt to be "rigorous" sometimes leads to models that are
>mathematically tractable but hopelessly unreal. Witness the
>rational expectations fad that is now largely discounted in the
>profession. Lucas, a founder of the New Classical school, agreed
>that the axioms required in the New Classical economics made the
>analysis 'artificial, abstract, and patently unreal' but insisted
>these postulates were necessary because they embodied the _only_
>scientific method of doing economics.
Without a tractable model, it's pretty hard to have anything to say.
What does unreal mean? To me, it means "I don't believe the result is
useful for understanding the world." However, that critque doesn't cut it
in seminars.
I wouldn't say that rational expectations is a fad. It is a
fundamental building block of nearly all economic models these days and
basically implies that economic agents don't make consistent mistakes.
What Lucas used in his early models and what has fallen out of favor is
the simple Lucas supply function with a signal extraction information
set-up for decision makers.
JOHN J WEATHERBY
> Now here a little bit of real nonsense. Name a classical economist who
said
money
> was absolutely non-neutral?
>
Hope I don't give fire to the radicals here but I can name three Chicago
grads that did purpose money neutrality. Lucas, Sargent, and Wallce. Two of
them won Nobel prizes. The problem is that most people over look that the
money neutrality stems from a special case where the general populace has
the same information set as the Fed. Sargent and Wallace state this is a
very special case. Most people against RE forget to mention this point.
UNder this case money is neutral because people are forming expectations
based on the last information gained. This is the same information the Fed
has, therefore the people will counteract the Fed's moves. The problem is as
S&W state the Fed has better information and gets it sooner. meaning that in
the real world money will not be neutral.
The answer is yes and no. There at least two Neo-Classical economist who
argue money neutrality but under a special case.
As far as Keynesians who advocated totaly non-neutrality, I can think of
know though. This is one Neo-Keynesian though, John Taylor. With staggered
wage contracts money neutrality is overturned.
Well just had to correct you a little bit. I doubt thes PK's you speak
have heard of either paper though.
JOHN J WEATHERBY
> Tobin) who had been trained in the classical economics tradition
> did not fully grasp Keynes's theory of unemployment. They
> unintentionally aborted Keynes's revolution when they claimed to
> have developed the analytical model to his general system which
> they promoted in journals and texts.
I doubt think Keynes totally grasped Keynes' theory of unemployment
either. Have you ever tried to read the GT. The biggest bunch of convoluded
mumbo-jumbo I have ever seen. If Hicks would not have written an
interpertation no one would know who the hell John Maynard Keynes is. His
work would have fallen into the rubbish heap along with Sir James Stewart's.
Come on here do you really believe Keynes' GT has any real validity on its
own. Animal Spirits control investment? You believe this too? Come on even
John Jaques Rosseau could have come up with something better than this.
\> money cannot be produced as labor produces goods; and the future
> cannot be predicted from the experience of the past.
>
Well if you believe this how can you be a serious academian? If you can't
predict from the past then what is the point. If this true just becuase
Keynesian theory worked yesterday doesn't mean it will work tomorrow. WIth
this in place you can not test anything. Nothing can proved. Just because it
worked a million times doesn't mean it will work again. Your own statement
says you have no lasting theoritical basis. What you propose is completely
uncertain. By your own words just because it work in the past doesn't mean
it will work today. Gee just like because Keynesian "theory" worked before
the oil shock doesn't mean it works after. That is true but not becuase past
performance is no benchmark but because Keynes had no theory. If it were not
for WWII the US would still be in a dispression because of Keynes and
Roosevelt.
> New Keynesians have attempted to patch some of the shortcomings
> of the old Keynesians theories, but are still following some of
> the same foundations of classical theory that Keynes rejected.
>
Wrong New Keynesians are patching anything they are rewriting Keynes
completely. One of the main points of Neo-Keynesians is that nominal wage
rigidities are not enough to keep the economy from clearing. There is a need
for real rigidities. There is need for real wage and price rigidities. See
John Taylor, Greg Mankiw etc. Actually read these works then you might
understand what I am talking about.
> In the above paragraph, Anderson unwittingly describes what is
> wrong with much of mainstream economics: teach what is generally
> believed, whether it is true or not.
Well by your statements, the past can not be used to predict the future.
Then how do you propose we find out what is true. You have no benchmark for
testing. Economist have long standing empirical standards that we use as a
benchmark. A way of looking at the past to if the theory works. These have
held up well why reject them. Until you can propose some other way to test
you can not say itsn't true. Again by your own words, the past can't predict
the future. THen what basis do we have to see if it is true by your
standard. I guess Mr. Wells you will jump in your time machine travel a
hundred years in the future and use the data for the next hundred years as a
test of the theory.
>Each generation of academic
> economists perpetuates some of the false concepts of previous
> generations, often because it is the path of least resistance.
Like what? what is false? What is your criteria? You can't prove anything by
your standards.
> Undergraduates are taught much that is known to be outdated,
> oversimplified, and in some cases misleading to false.
Misleading if the professor doesn't tell them the caveats. Oversimplified
perhaps. So do you think we should have undergraduates take two years of
math so they can understand new models, mathematically. Do you think we
should discuss the Lucas Supply curve before they even have a clue to what a
Supply curve is. Why have undergraduate economics at all. We will just call
upon big brother to gives the students he deems worthy of the program and
throw them into graduate analysis before they even know what a Demand curve
represents. Is this what you are proposing?
>PKs are
> considered heterodox economists and are not welcome in that
> environment. Nevertheless Post Keynesian economics is alive and
> well.
Well it sounds like from your post it might be becuase you propose no
method to prove what you say. Just what are you saying anyway? You're wrong
but I can't tell you what is right? Not quite up to academic snuff there.
>
> For those who would like to learn more about PK, read "Post
> Keynesian Macroeconomic Theory, A Foundation for Successful
> Economic Policies in the Twenty-first Century" by Paul Davidson,
> 1994, ISBN 1852788364 (paperback edition). Davidson is a
> professor at the University of Tennessee.
>
A real well noted and know one at that. Hey did anyone else hear of him
winning the Nobel Prize. He was on Mr. Hummel's list. You mean his wasn't
even on the real one? I wonder why. What does this teach anyway Political
Science or History?
John Weatherby
JOHN J WEATHERBY
> o Examples of Neo-Keynesians:
>
> Lawrence Klein, Paul Samuelson, Robert Solow, James Tobin
>
Three Nobel Prize winners. All respected writers publications in AER, JPE,
Economic Journal, etc.
> o A random selection of Post Keynesians:
>
> Paul Davidson, Alfred Eichner, Richard Goodwin, Nicholas Kaldor,
> Michal Kalecki, Jan Kregel, Luigi Pasinetti, Piero Sraffa,
> Joan Robinson, G. L. S. Shackle, Sidney Weintraub
>
With the exception of Joan Robinson who was a good micro economist, never
heard of any of them.
No nobel prizes. Robinson has published micro in many respected journal. One
big debate see started was can a aggregate production function exist. Seemed
to arguing against all macro at the time. Today even if you accept her
argument we have ways of dealing with hetreogenous agents and production
functions.
> Some themes in Post Keynesian economics include:
>
> o The importance of uncertainty, historical time, or non-ergodicity
> (as opposed to risk, logical time, and ergodic processes)
If there is uncertainity then it takes magic to make a model work not
theory.
>
> o The idea that money matters in all runs
>
No neoclassical econimist has ever said it didn't. Sergant and Wallace
presented a highly specialized case of money neutrality which they
themselves did even believe existed but that is it. Go back as far as David
Hume you will see money matters. It affects prices.
> and John Kenneth
> Galbraith (who towered head and shoulders over many another economist).
>
An arrogant fool. Case in point. We know know all there is to know about
economics. John Kenneth Galbraith cr. 1962
mas...@ix.netcom.com
Mark Patrick Witte
>grads that did purpose money neutrality. Lucas, Sargent, and Wallce. Two of
>them won Nobel prizes.
Who other than Lucas has a Chicago degree and who other than Lucas
won a Nobel?
> The answer is yes and no. There at least two Neo-Classical economist who
>argue money neutrality but under a special case.
>As far as Keynesians who advocated totaly non-neutrality, I can think of
>know though. This is one Neo-Keynesian though, John Taylor. With staggered
>wage contracts money neutrality is overturned.
Although in Taylor's model, money is neutral in the long run.
William F. Hummel
<JOH...@prodigy.net> wrote:
>\> money cannot be produced as labor produces goods; and the future
>> cannot be predicted from the experience of the past.
>
>Well if you believe this how can you be a serious academian? If you can't
>predict from the past then what is the point. If this true just becuase
>Keynesian theory worked yesterday doesn't mean it will work tomorrow. WIth
>this in place you can not test anything. Nothing can proved. Just because it
>worked a million times doesn't mean it will work again. Your own statement
>says you have no lasting theoritical basis. What you propose is completely
>uncertain. By your own words just because it work in the past doesn't mean
>it will work today. Gee just like because Keynesian "theory" worked before
>the oil shock doesn't mean it works after. That is true but not becuase past
>performance is no benchmark but because Keynes had no theory. If it were not
>for WWII the US would still be in a dispression because of Keynes and
>Roosevelt.
I assume you don't believe that you can actually predict the
future with precision. I certainly can't. Looking back, we find
no record of anyone living past age 150 years. With very high
PROBABILITY, we can predict that we will die before reaching that
age. But no one can predict at what age. Likewise, if we can
foresee what our financial liabilities will be in the coming
months and years, we could safely invest more in illiquid
wealth-producing assets rather than simply holding liquid
financial assets.
The point is that we all know that future events affecting our
individual well-being are unpredictable in varying degree, but
ALL unpredictable, even in a statistical sense which would
require the very questionable assumption of stationarity. For
that reason we attempt to self-insure by maintaining enough
liquidity to cover the unexpected. It is that very demand for
liquidity that Keynes sees as an important factor in
unemployment.
To summarize, paraphrasing Davidson's interpretation of Keynes's
views: In a free-market monetary economy with an uncertain
future, it is the existence of nonproducible assets [money] that
are held for liquidity purposes and for which the products of
industry are not effective substitutes that is the fundamental
cause of involuntary unemployment. The lack of perfect price
flexibility is not a necessary condition for demonstrating the
existence of unemployment.
Incidentally, I don't claim to be an academian, whatever that is.
WFH
JOHN J WEATHERBY
> won a Nobel?
Tom Sergant and Neil Wallace were both Chicago grads. I could be mistaken
but I think Sergant does have a nobel.
Mark Patrick Witte
No way, man! Sargent's education was totally saltwater, BA
Berkeley and Ph.D. Harvard. As for his Nobel, it exists purely in
expectational terms but I certainly favor it.
I've enjoyed his new _Conquest of American Inflation_ book, it's
a wonderfully open-minded and accessible piece from one of the most
technical fathers of modern macroeconomics.
JOHN J WEATHERBY
> No way, man! Sargent's education was totally saltwater, BA
> Berkeley and Ph.D. Harvard. As for his Nobel, it exists purely in
> expectational terms but I certainly favor it.
>
> I've enjoyed his new _Conquest of American Inflation_ book, it's
> a wonderfully open-minded and accessible piece from one of the most
> technical fathers of modern macroeconomics.
>
graduated from Chicago told. It was a bit humorous so I will share it with
you. The year Lucas started grad school at Chicago, Friedman was teaching
Macro One. After the first midterm Freidman was giving back the test. He
gave Lucas back his and told him he was the best student in the class. Lucas
looked at the grade and saw it was a B-. Lucas said to Freidman how can I be
the best in the class. I only got a B -. Friedman turned and said loudly,
"This is a very very bad class." Anyway I thought I remember hearing that
Sergant and Wallace were also in the class. Either Sargent started their and
transferd or my memory doesn't serve me as well as I think. Either one is
entirely possible.