Andreas Paulsen and Keynesianism

The economic theorist Andreas Paulsen (1899–1977) was one of the most important pioneers of Keynesianism in the German-speaking world after 1945. After many years working as an economic publicist and senior executive at chambers of commerce, he habilitated at the University of Leipzig at the end of 1946 and, after a short period of teaching at the University of Jena, accepted a professorship at the Free University Berlin in 1949, where he taught economic theory until his retirement in 1967. Practical economic experience and certain maxims of his scientific thinking were decisive for his turn to and approach to New Economics: He always analysed economic problems in the context of socio-philosophical and socio-political relationships. Solving them therefore required the use of different research methods and the instrumental application of analytical theories. In this sense, Keynes’ General Theory and primarily its economic policy implications seemed to him to be a suitable approach to protect market economies from damaging fluctuations in economic activity and thus from losses in prosperity. However, he considered the theoretical explanation to be incomplete insofar as it was limited to comparative-static analyses of the economic cycle. These should be supplemented or even replaced by dynamic theories that can adequately capture and explain equilibrium and disequilibrium macroeconomic processes over time. As Keynes called for, such theories should draw on psychological factors, which, as ‘ultimate independent variables’, determine economic behaviour guided by expectations.