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Keynes versus the Post Keynesians on the Principle of Effective Demand

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  • Jochen Hartwig

Abstract

The American Post Keynesians - those who attach importance to the 'Big P' and the absence of a dash between 'post' and 'Keynesian' - claim to be Keynes's most literal interpreters, or the 'truest' Keynesians (HOLT ET AL., 1998, p. 17). This paper compares the Post Keynesian interpretation of the Principle of Effective Demand, i.e. the D/Z-model, with Keynes's own presentation in Chapter 3 of the General Theory - and finds substantial differences. A reinterpretation of the D/Z-model is offered that would bring it into line with Chapter 3.

Suggested Citation

  • Jochen Hartwig, 2004. "Keynes versus the Post Keynesians on the Principle of Effective Demand," KOF Working papers 04-88, KOF Swiss Economic Institute, ETH Zurich.
    • Handle: RePEc:kof:wpskof:04-88
    DOI: 10.3929/ethz-a-004871570
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    References listed on IDEAS

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    1. Marc Lavoie, 2010. "Surveying Short-run and Long-run Stability Issues with the Kaleckian Model of Growth," Chapters, in: Mark Setterfield (ed.), Handbook of Alternative Theories of Economic Growth, chapter 6, Edward Elgar Publishing.

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    Keywords

    Effective demand; D/Z-model;

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