Editing Post-Keynesian economics

{{Short description|School of economic thought}}
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'''Post-Keynesian economics''' is a [[Schools of economic thought|school]] of [[economic thought]] with its origins in ''[[The General Theory of Employment, Interest and Money|The General Theory]]'' of [[John Maynard Keynes]], with subsequent development influenced to a large degree by [[Michał Kalecki]], [[Joan Robinson]], [[Nicholas Kaldor]], [[Sidney Weintraub (economist born 1914)|Sidney Weintraub]], [[Paul Davidson (economist)|Paul Davidson]], [[Piero Sraffa]], [[Jan Kregel]] and [[Marc Lavoie]]. Historian [[Robert Skidelsky, Baron Skidelsky|Robert Skidelsky]] argues that the post-Keynesian school has remained closest to the spirit of Keynes' original work.<ref>{{Harvnb|Skidelsky|2009|loc=p. 42}}</ref><ref>Financial markets, money and the real world, by Paul Davidson, [https://books.google.com/books?id=88XA6OHxVAcC&pg=PA88&q=post-keynesian pp. 88–89]</ref> It is a [[heterodox approach to economics]]<ref>{{Citation|last=Lavoie|first=Marc|year=2006|pages=1–24|publisher=Palgrave Macmillan UK|language=en|doi=10.1057/9780230626300_1|isbn=9781349283378|title=Introduction to Post-Keynesian Economics|chapter=Post-Keynesian Heterodoxy}}</ref><ref>{{Cite journal|last=Dequech|first=David|year=2012|title=Post Keynesianism, Heterodoxy and Mainstream Economics|journal=Review of Political Economy|language=en|volume=24|issue=2|pages=353–368|doi=10.1080/09538259.2012.664364|s2cid=154188135 |issn=0953-8259}}</ref> based on a [[non-equilibrium economics|non-equilibrium approach]].<ref name="katzner">{{cite book|chapter=Equilibrium and Non-equilibrium |pages=126–131 |first1=Donald W. |last1=Katzner |editor-last1=King |editor-first1=J.E. |date=2003 |title=The Elgar Companion to Post Keynesian Economics |publisher=Edward Elgar |location=Cheltenham, UK}}</ref>

==Introduction==
The term "post-Keynesian" was first used to refer to a distinct school of economic thought by [[Alfred Eichner|Eichner]] and Kregel (1975)<ref>{{Harvnb|Eichner and Kregel|1975}}</ref> and by the establishment of the ''Journal of Post Keynesian Economics'' in 1978. Prior to 1975, and occasionally in more recent work, ''post-Keynesian'' could simply mean economics carried out after 1936, the date of Keynes's ''General Theory''.<ref>{{Harvnb|King|2002|loc=p. 10}}</ref>

Post-Keynesian economists are united in maintaining that Keynes' theory is seriously misrepresented by the two other principal Keynesian schools: [[neo-Keynesian economics]], which was orthodox in the 1950s and 60s, and [[new Keynesian economics]], which together with various strands of [[neoclassical economics]] has been dominant in mainstream [[macroeconomics]] since the 1980s. Post-Keynesian economics can be seen as an attempt to rebuild economic theory in the light of Keynes' ideas and insights. However, even in the early years, post-Keynesians such as Joan Robinson sought to distance themselves from Keynes, and much current post-Keynesian thought cannot be found in Keynes. Some post-Keynesians took a more progressive view than Keynes himself, with greater emphases on worker-friendly policies and redistribution. Robinson, Paul Davidson and [[Hyman Minsky]] emphasized the effects on the economy of practical differences between different types of investments, in contrast to Keynes' more abstract treatment.<ref>{{Harvnb|Hayes|2008}}{{page needed|date=January 2018}}</ref>

The theoretical foundation of post-Keynesian economics is the [[principle of effective demand]] that demand matters in the long as well as the short run, so that a competitive market economy has no natural or automatic tendency towards [[full employment]].<ref>{{Harvnb|Arestis|1996}}</ref> Contrary to the views of new Keynesian economists working in the neoclassical tradition, post-Keynesians do not accept that the theoretical basis of the market's failure to provide full employment is rigid or [[sticky prices]] or wages. Post-Keynesians typically reject the [[IS–LM model]] of [[John Hicks]], which is very influential in neo-Keynesian economics, because they argue endogenous bank lending to be more significant than central banks' money supply for the interest rate.<ref>{{Cite journal|last=Palley|first=Thomas|date=2008-01-01|title=Macroeconomics without the LM: A Post-Keynesian Perspective|url=https://scholarworks.umass.edu/peri_workingpapers/175|journal=PERI Working Papers|doi=10.7275/1284545 }}</ref>

The contribution of post-Keynesian economics<ref>For a general introduction see {{Harvnb|Holt|2001}}</ref> has extended beyond the theory of aggregate employment to theories of [[income distribution]], growth, trade and development in which money demand plays a key role, whereas in neoclassical economics these are determined by the forces of technology, preferences and endowment. In the field of monetary theory, post-Keynesian economists were among the first to emphasise that money supply responds to the demand for bank credit,<ref>{{Harvnb|Kaldor|1980}}</ref> so that a [[central bank]] cannot control the quantity of money, but only manage the interest rate by managing the quantity of monetary reserves.

This view has largely been incorporated into mainstream economics and [[monetary policy]], which now targets the interest rate as an instrument, rather than attempting to accurately control the quantity of money.<ref>{{Cite news |date=2014-04-10 |title=Only the ignorant live in fear of hyperinflation |work=Financial Times |url=https://www.ft.com/content/46a1ce84-bf2a-11e3-a4af-00144feabdc0 |access-date=2023-04-06}}</ref> In the field of finance, Hyman Minsky put forward a theory of financial crisis based on [[financial fragility]], which has received renewed attention.<ref>{{Cite journal|last=Palley|first=Thomas|date=April 2010|title=The Limits of Minsky's Financial Instability Hypothesis as an Explanation of the Crisis|url=https://monthlyreview.org/2010/04/01/the-limits-of-minskys-financial-instability-hypothesis-as-an-explanation-of-the-crisis/|journal=Monthly Review|volume=61|issue=11 |page=28 |doi=10.14452/MR-061-11-2010-04_2 }}</ref><ref>{{Harvnb|Minsky|1975}}{{page needed|date=January 2018}}</ref>

== Main features ==
In 2009 [[Marc Lavoie]] listed the main features of post-Keynesian economics:<ref>{{Citation |last=Lavoie |first=Marc |title=Post-Keynesian Heterodoxy |year=2009 |url=http://dx.doi.org/10.1057/9780230235489_1 |work=Introduction to Post-Keynesian Economics |pages=1–24 |place=London |publisher=Palgrave Macmillan UK |doi=10.1057/9780230235489_1 |isbn=978-0-230-22921-1 |access-date=2022-04-04}}</ref>
* Effective demand
* Historical and dynamic time

He also lists 5 auxiliary features:
* The possible negative impact of flexible prices
* The monetary production of the economy
* Fundamental uncertainty
* Relevant and contemporary microeconomics
* Pluralism of theories and methods

== Strands ==
There are a number of strands to post-Keynesian theory with different emphases. Joan Robinson regarded [[Michał Kalecki]]'s theory of effective demand to be superior to Keynes' theories. Kalecki's theory is based on a [[class division]] between workers and capitalists and [[imperfect competition]].<ref>{{Harvnb|Robinson|1974}}</ref> Robinson also led the critique of the use of aggregate production functions based on homogeneous capital – the [[Cambridge capital controversy]] – winning the argument but not the battle.<ref>{{Harvnb|Pasinetti|2007}}</ref> The writings of [[Piero Sraffa]] were a significant influence on the post-Keynesian position in this debate, though Sraffa and his [[Neo-Ricardianism|neo-Ricardian]] followers drew more inspiration from [[David Ricardo]] than Keynes. Much of [[Nicholas Kaldor]]'s work was based on the ideas of increasing [[returns to scale]], [[path dependence]], and the key differences between the [[Primary sector of the economy|primary]] and [[Industry (economics)|industrial]] sectors.<ref>{{Harvnb|Harcourt|2006}}, {{Harvnb|Pasinetti|2007}}</ref>

[[Paul Davidson (economist)|Paul Davidson]]<ref>{{Harvnb|Davidson|2007}}</ref> follows Keynes closely in placing time and [[uncertainty]] at the centre of theory, from which flow the nature of money and of a monetary economy. [[Monetary circuit theory]], originally developed in continental Europe, places particular emphasis on the distinctive role of money as means of payment. Each of these strands continues to see further development by later generations of economists. An important method is [[stock-flow consistent model]]s, which enable a consistent description of receivables and liabilities as well as cash flows.<ref>{{cite book |last1=Godley |first1=Wynne |last2=Lavoie |first2=Marc |title=Monetary Economics. An Integrated Approach to Credit, Money, Income, Production and Wealth |publisher= Palgrave Macmillan |location=New York |date=2012 |ISBN = 978-0-230-30184-9}}</ref><ref>{{cite journal |last1=Richters |first1=Oliver |last2=Glötzl |first2=Erhard |title=Modeling economic forces, power relations, and stock-flow consistency: a general constrained dynamics approach |journal=Journal of Post Keynesian Economics |date=2020 |volume=43 |number=2 | doi=10.1080/01603477.2020.1713008|hdl=10419/178651 |hdl-access=free }}</ref><ref>{{cite journal |last1=Caverzasi |first1=Eugenio |last2=Godin |first2=Antoine |title=Post-Keynesian stock-flow-consistent modelling: a survey |journal=Cambridge Journal of Economics |volume=39 |issue=1 |date=2015 |pages=157–187 |doi=10.1093/cje/beu021}}</ref><ref>{{cite book|last1=Lavoie |first1=Marc |title=A Modern Guide to Post-Keynesian Institutional Economics |chapter=Stock-flow consistent macroeconomic modeling and Post-Keynesian Institutionalism |editor-last1=Whalen |editor-first1= Charles J. |date=2022 |doi=10.4337/9781800885752.00020}}</ref>

[[Modern Monetary Theory]] is a relatively recent offshoot independently pioneered by Warren Mosler that models the currency itself as a public monopoly as the micro foundation of macro economics, thereby augmenting the theory of effective demand, recognizing that coercive taxation drives the currency (the tax credit) and that the price level is necessarily a function of prices paid by the state. Subsequent MMT associated academics have used macroeconomic modelling of [[Wynne Godley]] and incorporated some of [[Hyman Minsky]]'s ideas on the labour market, as well as [[chartalism]] and [[functional finance]].

Recent{{when|date=August 2022}} work in post-Keynesian economics has attempted to provide micro-foundations for capacity underutilization as a [[coordination failure (economics)|coordination failure]], justifying government intervention in the form of aggregate demand stimulus.<ref name = "Petach and Tavani(2019)">{{cite journal | title = No one is alone: Strategic complementarities, capacity utilization, growth, and distribution | author1 = Luke Petach | author2 = Daniele Tavani | journal = Structural Change and Economic Dynamics | date = September 2019 | volume = 50 | pages = 203–215 | publisher = Elsevier | url = https://www.sciencedirect.com/science/article/abs/pii/S0954349X18303400 | doi = 10.1016/j.strueco.2019.07.001 | hdl = 10419/181477 | accessdate = 8 June 2021| hdl-access = free }}</ref><ref name = "Tavani and Petach(2021">{{cite journal | title = Firm beliefs and long-run demand effects in a labor-constrained model of growth and distribution | author1 = Daniele Tavani | author2 = Luke Petach | journal = Journal of Evolutionary Economics | publisher = Springer | date = April 2021 | volume = 31 | issue = 2 | pages = 353–377 | url = https://link.springer.com/article/10.1007/s00191-020-00680-w | doi = 10.1007/s00191-020-00680-w | s2cid = 253723600 | accessdate = 8 June 2021}}</ref>

== Current work ==
{{Unreferenced section|date=April 2015}}

=== Journals ===
Much post-Keynesian research is published in the ''[[Review of Keynesian Economics]]'' (ROKE), the ''Journal of Post Keynesian Economics'' (founded by [[Sidney Weintraub (economist born 1914 died 1983)|Sidney Weintraub]] and [[Paul Davidson (economist)|Paul Davidson]]), the ''Cambridge Journal of Economics'', the ''Review of Political Economy'', and the ''Journal of Economic Issues'' (JEI).

=== United Kingdom ===
There is also a United Kingdom academic association, the [http://www.postkeynesian.net Post-Keynesian Economics Society] (PKES). It was founded by [[Philip Arestis]] and [[Victoria Chick]] in 1988 as the Post-Keynesian Economics Study Group (PKSG)<ref>{{Cite web |title=Victoria Chick (1936–2023) {{!}} PKES |url=https://www.postkeynesian.net/news/17012023-victoria-chick/ |access-date=2023-01-18 |website=www.postkeynesian.net |language=en}}</ref> and changed its name in 2018. In the UK, post-Keynesian economists can be found in:
* [[SOAS University of London]]
* [[University of Greenwich]]
* [[University of Leeds]]
* [[Kingston University]]
* [[King's College London]], International Political Economy
* [[Goldsmiths, University of London]]
* [[University of the West of England, Bristol]]
* [[University of Hertfordshire]]
* [[Cambridge University]], Land Economy
* [[Birmingham City University]]
* [[University College London]], Institute for Innovation and Public Purpose
* [[Open University]]
* [[University of Winchester]]
Working on post-Keynesian economic foundations, the UK-based global economics [[Consulting firm|consultancy]], Cambridge Econometrics,<ref>{{Cite web |title=Cambridge Econometrics |url=https://www.camecon.com/ |access-date=2024-08-31 |website=Cambridge Econometrics |language=en-GB}}</ref> developed a computer-based ''[[Energy modeling|Energy]]-[[Environmental modelling|Environment]]-[[Macroeconomic model|Economy]] Model for Europe'' (E3ME)'''<ref>{{Cite web |title=E3ME by Cambridge Econometrics |url=https://www.e3me.com/ |access-date=2024-08-31 |website=E3ME |language=en-GB}}</ref>''' [[economic model]]. It is used by [[European Commission]] to analyse medium and long-term effects of its [[Environmental policy|environmental]] and [[Economic policy|economic policies]].<ref>{{Cite web |title=model E3ME - Energy - Environment - Economy Model for Europe |url=https://web.jrc.ec.europa.eu/policy-model-inventory/explore/models/model-e3me/ |access-date=31 August 2024 |website=Modelling Inventory and Knowledge Management System of the European Commission (MIDAS)}}</ref>

=== United States ===
In the United States, there are several universities with a post-Keynesian bent:{{explain|date=September 2020}}
* [[The New School]], New York City
* The [[University of Massachusetts Amherst]]
* The [[University of Utah]], Salt Lake City
* [[Bucknell University]], Lewisburg, Pennsylvania
* [[Denison University]], Granville, Ohio
* [[Levy Economics Institute]] at [[Bard College]], Annandale-on-Hudson, New York
* [[University of Missouri–Kansas City]]
* [[University of Denver]]
* [[Colorado State University]], Fort Collins
* The [[University of Massachusetts Boston]]
* [[John Jay College of Criminal Justice]] at [[City University of New York]], New York City

=== Netherlands ===
* [[Erasmus University]], Rotterdam
* [[International Institute of Social Studies]], The Hague
* [[Maastricht University]], Maastricht
* [[University of Groningen]], Groningen

=== France ===
* [[Sorbonne Paris North University]]

=== Canada ===

In Canada, post-Keynesians can be found at the [[University of Ottawa]] and [[Laurentian University]].

=== Germany ===

In Germany, post-Keynesianism is very strong at the [[Berlin School of Economics and Law]]<ref>{{cite web|url=https://campus4u.hwr-berlin.de/qisserver/rds?state=modulBeschrDetailInfo&moduleParameter=modDescr&struct=auswahlBaum&nextdir=qispos/modulBeschr/gast&next=redTree.vm&createInfoTree=Y&create=blobs&expand=1&nodeID=auswahlBaum%7Cmodul:pordnr=5012&pord.pordnr=5012&lastState=modulBeschrGast&noDBAction=y&init=y&asi=|title=HWR Berlin - Campus4U|website=campus4u.hwr-berlin.de}}</ref> and its master's degree courses: International Economics [M.A.] and Political Economy of European Integration [M.A.]. Many German Post-Keynesians are organized in the Forum Macroeconomics and Macroeconomic Policies.<ref>{{cite journal | doi = 10.4337/ejeep.2009.02.04 | volume=6 | issue=2 | title=Forum: The Research Network Macroeconomics and Macroeconomic Policies (FMM) – Past, present and future | year=2009 | journal=European Journal of Economics and Economic Policies: Intervention | pages=166–173 | last1 = Hein | first1 = Eckhard | last2 = Priewe | first2 = Jan| doi-access=free }}</ref>

=== Australia ===

==== University of Newcastle ====
The [[University of Newcastle (Australia)|University of Newcastle]] in New South Wales, Australia, houses the post-Keynesian [[think-tank]] the [[Centre of Full Employment and Equity]] (CofFEE).

==Major post-Keynesian economists==
{{Main|List of Post-Keynesian economists}}
{{See also|Category:Post-Keynesian economists}}

Major post-Keynesian economists of the first and second generations after Keynes include:
{{colbegin|colwidth=17em}}
* [[Marc Lavoie]]
* [[Philip Arestis]]
* [[Victoria Chick]]
* [[Alfred Eichner]]
* [[James Crotty (economist)|James Crotty]]
* [[Paul Davidson (economist)|Paul Davidson]]
* [[Wynne Godley]]
* [[Geoff Harcourt]]
* [[Donald J. Harris]]
* [[Michael Hudson (economist)|Michael Hudson]]
* [[Nicholas Kaldor]]
* [[Michał Kalecki]]
* [[Frederic Sterling Lee|Frederic S. Lee]]
* [[Augusto Graziani]]
* [[Steve Keen]]
* [[Jan Kregel]]
* [[Paolo Leon]]
* [[Abba P. Lerner]]
* [[Hyman Minsky]]
* [[Basil Moore (economist)|Basil Moore]]
* [[Edward J. Nell]]
* [[Luigi Pasinetti]]
* [[Joan Robinson]]
* [[George Shackle]]
* [[Anthony Thirlwall]]
* [[Fernando Vianello]]
* [[William Vickrey]]
* [[L. Randall Wray]]
* [[Dimitri B. Papadimitriou]]
* [[Sidney Weintraub (economist born 1914 died 1983)|Sidney Weintraub]]
{{colend}}

==See also==
* [[Disequilibrium macroeconomics]]
* [[Endogenous money]]
* [[Job guarantee]]
* [[Keynesian economics]]
* [[Neo-Keynesian economics]]
* [[New Keynesian economics]]
* [[A Treatise on Probability|Keynes' Treatise on Probability]]

==Notes==
{{Reflist}}

==References==
* {{cite journal
  | last = Arestis
  | first = Philip
  | title = Post-Keynesian economics: towards coherence
  | journal = Cambridge Journal of Economics
  | volume = 20
  | pages = 111–135
  | year = 1996
  | doi=10.1093/oxfordjournals.cje.a013604}}
* {{cite book
  | last = Davidson
  | first = Paul
  | author-link = Paul Davidson (economist)
  | title = John Maynard Keynes
  | publisher = [[Palgrave Macmillan]]
  | year = 2007
  }}
* {{cite journal
  | last = [[Alfred Eichner|Eichner]] and [[Jan Kregel|Kregel]]
  | title = An Essay on Post-Keynesian Theory: A New Paradigm in Economics
  | journal = Journal of Economic Literature
  | volume = 13
  | pages = 1293–1314
  | year = 1975}}
* {{cite book
  | last = Harcourt
  | first = Geoff
  | title = The Structure of Post-Keynesian Economics
  | publisher = [[Columbia University Press]]
  | year = 2006
  }}
* {{cite book
  | last = Hayes
  | first = M.G.
  | title = The Economics of Keynes: A New Guide to the General Theory
  | year = 2008
  | isbn = 978-1-84844-056-2
  |publisher = Edward Elgar Publishing
 |ref = CITEREFSHayes2008}}
* {{cite journal
  | last = Kaldor
  | first = Nicholas
  | author-link = Nicholas Kaldor
  | title = Monetarism and UK economic policy
  | journal = Cambridge Journal of Economics
  | volume = 4
  | issue = 3
  | pages = 271–292
  | doi = 10.1093/oxfordjournals.cje.a035457
  | year = 1980}}
* {{cite book
  | last = King
  | first = J.E.
  | title = A history of post Keynesian economics since 1936
  | year = 2002
  | isbn = 978-1-84064-420-3
  |publisher = Edward Elgar Publishing
 |ref = CITEREFSKing2002}}
* {{cite book
  | last = Minsky
  | first = Hyman
  | author-link = Hyman Minsky
  | title = John Maynard Keynes
  | publisher = [[Columbia University Press]]
  | year = 1975}}
* {{cite book
  | last = Pasinetti
  | first = Luigi
  | author-link = Luigi Pasinetti
  | title = Keynes and the Cambridge Keynesians
  | publisher = [[Columbia University Press]]
  | year = 2007
  }}
* {{cite book
  | last = Robinson
  | first = Joan
  | author-link = Joan Robinson
  |author2=Eatwell, John |author-link2=John Eatwell
  | title = An Introduction to Modern Economics
  | publisher = [[McGraw Hill]]
  | edition = 2
  | year = 1974
  | ref = CITEREFRobinson1974}}
* {{cite book
|last= Skidelsky
|first= Robert
|author-link= Robert Skidelsky
|title= Keynes: The Return of the Master
|year= 2009
|page= [https://archive.org/details/keynesreturnofma0000skid/page/42 42]
|isbn= 978-1-84614-258-1
|publisher= Allen Lane
|url= https://archive.org/details/keynesreturnofma0000skid/page/42
}}

==Further reading==
* {{cite book
  | last = Holt
  | first = Ric
  |author2=Pressman, Steven |author-link2=Steven Pressman (economist)
  | title = A New Guide to Post Keynesian Economics
  | publisher = [[Routledge]]
  | year = 2001
  | ref = CITEREFHolt2001}}
* Holt, Ric; [[Steven Pressman (economist)|Pressman, Steven]] (2006). ''Empirical Post Keynesian Economics: Looking at the Real World.'' M.E. Sharpe.

==External links==
* [http://www.nuevatribuna.es/media/nuevatribuna/files//2013/03/12/harcourt_structureofpost-keynesianeconomics.pdf Structure of Post Keynesian Economics-Geoff Harcourt]
* [http://www.columbia.edu/dlc/wp/econ/vickrey.html William Vickrey -----Fifteen Fatal Fallacies of Financial Fundamentalism: A Disquisition on Demand Side Economics]
* [http://macropolis.wikispaces.com/file/view/Introduction+to+Post-Keynesian+Economics+-+Lavoie.pdf Presentation of post Keynesian economics Marc Lavoie] {{Webarchive|url=https://web.archive.org/web/20191230132039/https://macropolis.wikispaces.com/file/view/Introduction+to+Post-Keynesian+Economics+-+Lavoie.pdf |date=30 December 2019 }}
* [https://web.archive.org/web/20120610214633/http://www.newschool.edu/scepa/events/papers/051005_Davidson.pdf Samuelson and the Keynes/Post Keynesian Revolution:by Paul Davidson]
* [http://www.huffingtonpost.com/l-randall-wray/the-federal-budget-is-not_b_457404.html Professor L. Randall Wray:Why The Federal Budget Is Not Like a Household Budget]
* [https://academic.oup.com/cje/article-abstract/20/1/111/1716931 Post-Keynesian economics: towards coherence Cambridge Journal of Economics]

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