The State of Short-Term Expectation
AbstractThe claim that Keynes makes a tacit assumption in Chapter 3 of The General Theory, that short-term expectations are fulfilled, is unwarranted and unnecessary. The seminal paper by Kregel (1976) and its subsequent development by Chick, among others, which has contributed to the general acceptance of this claim, is critically evaluated in depth. The present paper clears the ground for a recognition that Keynes instead adopted the assumption of judicious foresight, which would now be called short-term rational expectations. This recognition in turn should encourage a reappraisal of Keynes’s thought, by mainstream economists and others.
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Bibliographic InfoPaper provided by Post Keynesian Economics Study Group (PKSG) in its series Working Papers with number PKWP1107.
Length: 31 pages
Date of creation: Sep 2011
Date of revision:
Keynes – effective demand – formation of expectations;
Other versions of this item:
- B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics
- B31 - Schools of Economic Thought and Methodology - - History of Economic Thought: Individuals - - - Individuals
- E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian
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"The State of Short-Term Expectation,"
PKWP1107, Post Keynesian Economics Study Group (PKSG).
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