The state of short-term expectation
The claim that Keynes makes a tacit assumption in Chapter 3 of The General Theory, that short-term expectations are fulfilled, is unwarranted and unnecessary. The seminal paper by Kregel (1976) and its subsequent development by Chick, among others, which has contributed to the general acceptance of this claim, is critically evaluated in depth. The present paper clears the ground for a recognition that Keynes instead adopted the assumption of judicious foresight, which would now be called short-term rational expectations. This recognition in turn should encourage a reappraisal of Keynes’s thought, by mainstream economists and others.
|Date of creation:||Sep 2011|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.postkeynesian.net|
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Eleonora Sanfilippo, 2011. "The Short Period and the Long Period in Macroeconomics: An Awkward Distinction," Review of Political Economy, Taylor & Francis Journals, vol. 23(3), pages 371-388.
- John King, 1993.
"Aggregate Supply and Demand Analysis Since Keynes: A Partial History,"
1993.16, School of Economics, La Trobe University.
- John King, 1993. "Aggregate Supply and Demand Analysis Since Keynes: A Partial History," Working Papers 1993.16, School of Economics, La Trobe University.
- Gary Mongiovi, 2000. "Shackle on Equilibrium: A Critique," Review of Social Economy, Taylor & Francis Journals, vol. 58(1), pages 108-124.
- Roger Backhouse, 2004. "History and equilibrium: A partial defense of equilibrium economics," Journal of Economic Methodology, Taylor & Francis Journals, vol. 11(3), pages 291-305.
- M. G. Hayes, 2006. "The Economics of Keynes," Books, Edward Elgar Publishing, number 12601.
- M. G. Hayes, 2013.
"The State of Short-term Expectation,"
Review of Political Economy,
Taylor & Francis Journals, vol. 25(2), pages 205-224, April.
- Mark Hayes, 2006. "The Economics of Keynes: A New Guide to The General Theory," Books, Post Keynesian Economics Study Group (PKSG), number nggt.
- Claudio Sardoni, 2008. "Some considerations on equilibrium and realism," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 30(3), pages 485-490, April.
- Vercelli,Allessandro, 1991. "Methodological Foundations of Macroeconomics," Cambridge Books, Cambridge University Press, number 9780521392945, Junio.
- Tony Lawson, 2005. "The (confused) state of equilibrium analysis in modern economics: an explanation," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 27(3), pages 423-444, April.
- Kregel, J A, 1976. "Economic Methodology in the Face of Uncertainty: The Modelling Methods of Keynes and the Post-Keynesians," Economic Journal, Royal Economic Society, vol. 86(342), pages 209-25, June.
- M. G. Hayes, 2008. "Keynes's degree of competition," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 15(2), pages 275-291.
- Dany Lang & Mark Setterfield, 2007. "History versus equilibrium? on the possibility and realist basis of a general critique of traditional equilibrium analysis," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 29(2), pages 191-209, January.
- Mark Hayes, 2007. "The Point of Effective Demand," Review of Political Economy, Taylor & Francis Journals, vol. 19(1), pages 55-80.
- Olivier Allain, 2009.
"Effective Demand and Short-term Adjustments in the General Theory,"
Review of Political Economy,
Taylor & Francis Journals, vol. 21(1), pages 1-22.
- Olivier Allain, 2006. "Effective demand and short-term adjustments in the General Theory," Cahiers de la Maison des Sciences Economiques bla06018, Université Panthéon-Sorbonne (Paris 1).
- Jochen Hartwig, 2007. "Keynes vs. the Post Keynesians on the Principle of Effective Demand," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 14(4), pages 725-739.
When requesting a correction, please mention this item's handle: RePEc:pke:wpaper:pkwp1107. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jo Michell)
If references are entirely missing, you can add them using this form.