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The general theory at 80: reflections on the history and enduring relevance of Keynes? economics

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  • Thomas I. Palley

Abstract

This paper reflects on the history and enduring relevance of Keynes? economics. Keynes unleashed a devastating critique of classical macroeconomics and introduced a new replacement schema that defines macroeconomics. The success of the Keynesian revolution triggered a counter-revolution that restored the classical tradition and now enforces a renewed classical monopoly. That monopoly has provided the intellectual foundations for neoliberalism which has produced economic and political conditions echoing the 1930s. Openness to Keynesian ideas seems to fluctuate with conditions, and current conditions are conducive to revival of the Keynesian revolution. However, a revival will have to overcome the renewed classical monopoly.

Suggested Citation

  • Thomas I. Palley, 2017. "The general theory at 80: reflections on the history and enduring relevance of Keynes? economics," FMM Working Paper 07-2017, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
  • Handle: RePEc:imk:fmmpap:07-2017
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    File URL: http://www.boeckler.de/pdf/p_fmm_imk_wp_07_2017.pdf
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    References listed on IDEAS

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    1. Davidson, Paul, 1972. "Money and the Real World," Economic Journal, Royal Economic Society, vol. 82(325), pages 101-115, March.
    2. Thomas Palley, 2010. "The Relative Permanent Income Theory of Consumption: A Synthetic Keynes-Duesenberry-Friedman Model," Review of Political Economy, Taylor & Francis Journals, vol. 22(1), pages 41-56.
    3. Burgin, Angus, 2012. "The Great Persuasion: Reinventing Free Markets since the Depression," Economics Books, Harvard University Press, number 9780674058132, December.
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    More about this item

    Keywords

    Keynes; General Theory; Keynesian revolution; Classical economics; classical counter-revolution;

    JEL classification:

    • E0 - Macroeconomics and Monetary Economics - - General
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • B1 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925
    • B2 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925

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