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A Brief Introduction to Post Keynesian Macroeconomics

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  • J. E. King

Abstract

I begin by setting out the core of Post Keynesian macroeconomics, and then distinguish three schools within Post Keynesian theory: the fundamentalist Keynesian approach taken by Paul Davidson, the Kaleckian variant represented by Eckhard Hein, and Hyman Minsky’s financial instability hypothesis. I continue by identifying what Post Keynesian macroeconomics is not, and outlining some very substantial criticisms of both "Old Keynesian" and "New Keynesian" theory. After an historical sketch of the development of Post Keynesian theory in Cambridge (UK) and the United States in the 1950s and 1960s, I summarise the contributions of two eminent Austrian theorists, Josef Steindl and Kurt Rothschild. I then discuss the distinctive Post Keynesian position on questions of macroeconomic policy, offer an explanation of the Global Financial Crisis that began in 2007 and suggest some policy measures that might make similar crises less likely in the future. I conclude by discussing the relationship between Post Keynesianism and three other schools of heterodox economic theory: Marxism, institutionalism and behavioural economics.

Suggested Citation

  • J. E. King, 2013. "A Brief Introduction to Post Keynesian Macroeconomics," Wirtschaft und Gesellschaft - WuG, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik, vol. 39(4), pages 485-508.
    • Handle: RePEc:clr:wugarc:y:2013v:39i:4p:485
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    References listed on IDEAS

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    1. Henry C. Wallich & Sidney Weintraub, 1971. "A Tax-Based Incomes Policy," Journal of Economic Issues, Taylor & Francis Journals, vol. 5(2), pages 1-19, June.
    2. Robinson, Joan, 1972. "The Second Crisis of Economic Theory," American Economic Review, American Economic Association, vol. 62(2), pages 1-10, May.
    3. Jakob Kapeller & Bernhard Schütz, 2014. "Debt, boom, bust: a theory of Minsky-Veblen cycles," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 36(4), pages 781-814.
    4. J.E. King, 2011. "Four Theses on the Global Financial Crisis," Chapters, in: Steven Kates (ed.), The Global Financial Crisis, chapter 7, Edward Elgar Publishing.
    5. Eichner, Alfred S & Kregel, J A, 1975. "An Essay on Post-Keynesian Theory: A New Paradigm in Economics," Journal of Economic Literature, American Economic Association, vol. 13(4), pages 1293-1314, December.
    6. Paul Davidson, 1978. "Money and the Real World," Palgrave Macmillan Books, Palgrave Macmillan, edition 0, number 978-1-349-15865-2, April.
    7. J. E. King, 2012. "The Microfoundations Delusion," Books, Edward Elgar Publishing, number 14065.
    8. George A. Akerlof, 2009. "How Human Psychology Drives the Economy and Why It Matters," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(5), pages 1175-1175.
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    10. J.E. King, 2010. "Reflections on the Global Financial Crisis," Chapters, in: Steven Kates (ed.), Macroeconomic Theory and its Failings, chapter 9, Edward Elgar Publishing.
    11. Eckhard Hein, 2012. "The Macroeconomics of Finance-Dominated Capitalism – and its Crisis," Books, Edward Elgar Publishing, number 14931.
    12. Paul De Grauwe, 2012. "Lectures on Behavioral Macroeconomics," Economics Books, Princeton University Press, edition 1, volume 1, number 9891, December.
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    4. repec:clr:wugarc:y:2016v:42i:03p:405 is not listed on IDEAS
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    6. Ewald Walterskirchen, 2016. "Neukeynesianismus und Postkeynesianismus: Was für ein Unterschied!," Wirtschaft und Gesellschaft - WuG, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik, vol. 42(3), pages 405-430.

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