Colin Rogers () (School of Economics, University of Adelaide)
Abstract
There has been no Keynesian Revolution in economic theory but there has been an unacknowledged Keynes's Revolution in economic policy. Keynes's theoretical revolution rested on the adoption of monetary analysis and the application of the principle of effective demand to demonstrate the existence of multiple long-period equilibria. Keynes's policies 鈥揷reating a role for `Big Government' and the 鈥楤ig Bank'- follow from his theory and have changed the structure of the laissez faire economy. Many Keynesians fail to acknowledge either of these issues and continue the classical tradition of real analysis and the assumption of unique long-period equilibrium. Real analysis, as a special case of Keynes's monetary analysis, provides a distorted perspective of the responsibilities of monetary policy which largely accounts for the increasing fragility and volatility exhibited by financial markets over the past two decades.
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Publisher Info
Paper provided by University of Adelaide, School of Economics in its series Working Papers with number
2008-05.
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Franklin Allen & Elena Carletti, 2007.
"Banks, Markets and Liquidity,"
RBA Annual Conference Volume,
in: Christopher Kent & Jeremy Lawson (ed.), The Structure and Resilience of the Financial System
Reserve Bank of Australia.
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