A Behavioural Perspective on Keynesian Decision Theory
AbstractKeynes's theory of probability has been studied intensively in the past few years with much discussion of its relevance to modern economics. This paper examines Keynes's ideas in light of criticisms made by other authors and comes to the conclusion that Keynes's views on rationality are critically flawed. However, it is asserted that this actually allows more freedom for investigation when it is combined with insights from behavioural economics and gives examples where this could be fruitful. One of the side-effects of this is that there is a narrowing of the gap between Keynesian and mainstream behavioural views on decision-making.
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Bibliographic InfoPaper provided by SCEME in its series SCEME Working Papers: Advances in Economic Methodology with number 031/2009.
Length: 22 pages
Date of creation: Feb 2009
Date of revision:
uncertainty; Keynes; behavioral economics;
Find related papers by JEL classification:
- B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-05-02 (All new papers)
- NEP-CBA-2009-05-02 (Central Banking)
- NEP-CBE-2009-05-02 (Cognitive & Behavioural Economics)
- NEP-EVO-2009-05-02 (Evolutionary Economics)
- NEP-HPE-2009-05-02 (History & Philosophy of Economics)
- NEP-NEU-2009-05-02 (Neuroeconomics)
- NEP-PKE-2009-05-02 (Post Keynesian Economics)
- NEP-UPT-2009-05-02 (Utility Models & Prospect Theory)
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