Monday, July 28, 2014

Tom Palley on New Keynesianism as a Club

Tom Palley discusses the fact that New Keynesian have 'rediscovered' several of the ideas that other Keynesians, in particular the more heterodox sort (but not only, he includes James Tobin too), without properly acknowledging them. In his words:
"For almost thirty years, New Keynesians have dismissed other Keynesians and not bothered to stay acquainted with their research. But now that the economic crisis has forced awareness, the right thing is to acknowledge and incorporate that research."
Read rest here. By the way, Tobin, in his little book Asset Accumulation and Economic Activity, discusses why even with price flexibility the system does not have a tendency to full employment, being the closest to the alternative Keynesian ideas, or arguably to Keynes' own views. For Minsky's review of that book, in which he also criticizes Tobin for dismissing the research of post-Keynesians, go here.

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