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Uncertainty and Expectations in Shackle's Theory of Capital and Interest


  • Meacci, Ferdinando


This paper is focused on the macroeconomic aspects of Shackle’s theory of decisions under uncertainty and, more particularly, of his theory of capital and interest. The paper starts by arguing that Shackle’s general approach stems from the identification of, and conflict between, two Paradigms: the Economics of Uncertainty and Expectations (EUE), which was developed in the “years of high theory”, and General Equilibrium Theory (GET). The paper brings out some flaws in Shackle’s view of this conflict and highlights the insights and advances by which Shackle identifies and strengthens the major features of the EUE Paradigm. Amongst these features is the focus on historical time, on expectations and their failures, on money as a store of value, on ex ante and ex post magnitudes, on macroeconomic equilibrium and disequilibrium, on economic fluctuations. The paper argues that, while clarifying or criticizing in his brilliant manner many or some parts of the Keynesian theory of interest or of the Austrian theory of capital, Shackle fails to highlight the difference between the theory of interest as such (the old Austrian theory) and the theory of the money rate of interest (the Keynesian theory) as well as the difference between the theory of capital in the context of logical time (the old Austrian approach) and the theory of capital in the context of historical time (Hayek’s and Shackle’s own approach)

Suggested Citation

  • Meacci, Ferdinando, 2006. "Uncertainty and Expectations in Shackle's Theory of Capital and Interest," MPRA Paper 11700, University Library of Munich, Germany, revised 29 Jun 2007.
  • Handle: RePEc:pra:mprapa:11700

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    References listed on IDEAS

    1. J. M. Keynes, 1937. "The General Theory of Employment," The Quarterly Journal of Economics, Oxford University Press, vol. 51(2), pages 209-223.
    2. Harcourt,G. C., 2008. "The Structure of Post-Keynesian Economics," Cambridge Books, Cambridge University Press, number 9780521067539, April.
    3. 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 209-225, June.
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    Cited by:

    1. Ferdinando Meacci, 2012. "The disappointment of expectations and the theory of fluctuations," History of Economic Ideas, Fabrizio Serra Editore, Pisa - Roma, vol. 20(2), pages 157-184.

    More about this item


    Shackle; uncertainty; expectations; capital; interest;

    JEL classification:

    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian
    • B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics
    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)


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