Chapter 18 of the General Theory “Further Analysed”: The Theory of Economics as A Method
In 1987, Greenwald and Stiglitz accused Keynes’s summary of the General Theory in chapter 18 of relying upon “neoclassical and Marshallian tools”. A number of contributions have on the contrary emphasized the methodological importance of this chapter, which this paper revisits in the light of A Treatise on Probability. It thereby shows that the notions of cause and dependence used to discuss the relationships between independent and dependent variables of the General Theory are related to the concept of “independence for knowledge”, which concerns logical connections between arguments rather than material connections between events. We demonstrate that such logical connections established in chapter 18 are rediscussed in chapters 19-21, where Keynes allows for probable repercussions between the factors and removes the simplifying assumptions previously introduced. After stressing the methodological continuity this method provides with the analysis of credit cycles in A Treatise on Money, we argue that chapter 18 is an indispensable tool to decode the internal text structure of the General Theory. We thus characterize the latter as a vademecum to the complex economic world, the author providing an analytical method allowing – and requiring – the readers to emulate his efforts to grasp the complexity and interdependence of the economic material.
|Date of creation:||Mar 2011|
|Contact details of provider:|| Postal: Via Perrone 18, 28100 Novara|
Web page: http://semeq.unipmn.it/
More information through EDIRC
References listed on IDEAS
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.:
- Claudio Sardoni, 1990. "Chapter 18 of the General Theory: Its Methodological Importance," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 12(2), pages 293-307, January.
- Rod O'Donnell, 1995. "Keynes on Aesthetics," History of Political Economy, Duke University Press, vol. 27(5), pages 93-121, Supplemen.
- Gillies Dostaler, 2007. "Keynes and his Battles," Books, Edward Elgar Publishing, number 1404, July.
- 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.
- Marchionatti Roberto, 2009. "J. M. Keynes, thinker of economic complexity," CESMEP Working Papers 200902, University of Turin.
- J. B. Davis, 1990. "Keynes and Organicism," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 12(2), pages 308-315, January.
- Chick, Victoria & Dow, Sheila C, 2001. "Formalism, Logic and Reality: A Keynesian Analysis," Cambridge Journal of Economics, Oxford University Press, vol. 25(6), pages 705-721, November.
- Anna Carabelli & Nicolo De Vecchi, 1999. "'Where to draw the line'? Keynes versus Hayek on Knowledge, ethics and economics," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 6(2), pages 271-296. Full references (including those not matched with items on IDEAS)