The Continuing Relevance of Keynes's Philosophical Thinking: Reflexivity, Complexity, and Uncertainty
This paper explains the continuing relevance of Keynes’s philosophical thinking in terms of his anticipation of complexity thinking in economics. It argues that that reflexivity is a central feature of the philosophical foundations of complexity theory, and shows that Keynes employed an understanding of reflexivity in both his philosophical and economic thinking. This argument is first developed in terms of his moral science conception of economics and General Theory beauty contest analysis. The paper advances a causal model that distinguishes direct causal relationships and reflexive feedback channels, uses this to distinguish Say’s Law economics and Keynes's economics, and explains the economy as non-ergodic in these terms. Keynes’s policy activism is explained as a complexity view of economic policy that works like self-fulfilling and self-defeating prophecies. The paper closes with a discussion of the ontological foundations of uncertainty in Keynes's thinking, and comments briefly on what a complexity-reflexivity framework implies regarding his thinking about time.
|Date of creation:||Dec 2016|
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- Sheila C. Dow, 2015. "Addressing uncertainty in economics and the economy," Cambridge Journal of Economics, Oxford University Press, vol. 39(1), pages 33-47.
- Anna M. Carabelli & Mario A. Cedrini, 2014. "Chapter 18 of The General Theory ‘further analysed’: economics as a way of thinking," Cambridge Journal of Economics, Oxford University Press, vol. 38(1), pages 23-47.
- Roberto Marchionatti, 2010. "J. M. Keynes, thinker of economic complexity," History of Economic Ideas, Fabrizio Serra Editore, Pisa - Roma, vol. 18(2), pages 115-146.
- Victoria Chick, 1983. "Macroeconomics after Keynes: A Reconsideration of the General Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262530457, January.
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