The Modernity of Keynesian Thinking on Economic Policy from an Institutional Perspective

Titolo Rivista HISTORY OF ECONOMIC THOUGHT AND POLICY
Autori/Curatori Alessandro Morselli
Anno di pubblicazione 2024 Fascicolo 2023/2
Lingua Inglese Numero pagine 20 P. 67-86 Dimensione file 81 KB
DOI 10.3280/SPE2023-002004
Il DOI è il codice a barre della proprietà intellettuale: per saperne di più clicca qui

Qui sotto puoi vedere in anteprima la prima pagina di questo articolo.

Se questo articolo ti interessa, lo puoi acquistare (e scaricare in formato pdf) seguendo le facili indicazioni per acquistare il download credit. Acquista Download Credits per scaricare questo Articolo in formato PDF

Anteprima articolo

FrancoAngeli è membro della Publishers International Linking Association, Inc (PILA)associazione indipendente e non profit per facilitare (attraverso i servizi tecnologici implementati da CrossRef.org) l’accesso degli studiosi ai contenuti digitali nelle pubblicazioni professionali e scientifiche

The objective of the paper concerns the analysis of Keynesian thinking on economic policy from an institutional perspective, since Keynes ignores both institutions and the possibility that a modification of them might change the way expectations are formed. Specifically, the relationship between expectations and economic activity will be examined, taking into consideration the concept of an agent formulating expectations. It will be emphasised how an institutional orientation can help the application of Keynesian economic policies by setting aside individualistic and psychological principles, on which Keynesian thinking is based, and incorporating an institutional and historical examination of political and economic institutions into expectations. This represents an attempt to incorporate the institutional dimension into Keynesian doctrine to strengthen it, without placing the individual at the core of the analysis. For example, the issue of the rigidity of monetary wages highlighted by Keynes in chapter seventeen of the General Theory will be interpreted from an institutional perspective. Indeed, rigidities and customary practices are important in reducing uncertainty and promoting efficient decision-making. It is precisely on uncertainty that individuals acquire knowledge based on their involvement in social practices and observation of the habits that form the structure of social and economic life.

Keywords:expectations; uncertainty; Keynes; institutional view; economic policy; Austrian school.

Jel codes:B13, B15, B25, B52

  1. Aoki M. (2007). Endogenizing institutions and institutional changes, Journal of Institutional Economics, 3(1): 1-31.
  2. Bausor R. (1983). The rational-expectations hypothesis and the epistemics of time, Cambridge Journal of Economics, 7(1): 1-10.
  3. Beer S. (1972). Brain of the firm, London, Allen Lane.
  4. Boltho A. (1983). Is western Europe caught in a expectations trap?, Lloyds Bank Review, 148: 1-13.
  5. Brunner J.S. (1973). Beyond the information given, London, George Allen and Unwin.
  6. Buiter W.H. (1980). The macroeconomics of Dr Pangloss: a critical survey of the new classical macroeconomics, Economic Journal, 90: 34-50.
  7. Carvalho F. (1983). On the concept of time in shacklean and Sraffian economics, Journal of Post Keynesian Economics, 6(2): 265-280.
  8. Coddington A. (1983). Keynesian economics: the search for first principles, London, George Allen and Unwin.
  9. Davidson P. (1982). Rational expectations: a fallacious foundation for studying crucial decision-making processes, Journal of Post Keynesian Economics, 5(2): 182-198.
  10. Dequech D. (2003). Cognitive and cultural embeddedness: combining institutional economics and economic sociology, Journal of Economic Issues, 37(2): 461-70. Doyal L., Gough I. (1984). A theory of human needs, Critical Social Policy, 4(10): 6-38.
  11. Doyal L., Gough I. (1986). Human needs and strategies for social change. In Ekins
  12. P. (eds.), The living economy: a new economics in the making, London and New York, Routledge & Kegan Paul, 69-80.
  13. Earl P.E. (1983). The economic imagination: towards a behavioural analysis of choice, Brighton, Wheatsheaf.
  14. Fritz R.G., Fritz J.M. (1985). Linguistic structure and economic method, Journal of Economic Issues, 19(1): 75-101.
  15. Garner C.A. (1982). Uncertainty, human judgment, and economic decisions, Journal of Post Keynesian Economics, 4(3): 413-424.
  16. Giorgetti G. (1961). Karl Marx. Teorie sul plusvalore, Roma, Editori Riuniti. Haltiwanger J., Waldman M. (1985). Rational expectations and the limits of ration-ality: an analysis of heterogeneity, American Economic Review, 75(3): 326-340.
  17. Handa J. (1982). Rational expectations: what do they mean? Another view, Journal of Post Keynesian Economics, 4(4): 558-564.
  18. Hayek F.Von (1952). The sensory order: an inquiry into the foundations of theoretical psychology, London, Routledge.
  19. Hayek F.Von (1948). Individualism and economic order, Chicago, Chicago University Press.
  20. Hicks J.R. (1969). Automatists, hawtreyans and keynesians, Journal of Money, Credit and Banking, 3(1): 307-317.
  21. Hodgson G. (1985), Persuasion, expectations and the limits to Keynes. In Lawson T. and H. Pesaran (eds), Keynes’ economics: methodological issues, London, Croom Helm, 10-45.
  22. Hodgson G. (1991). Economia e istituzioni, Ancona, Otium. Keynes J.M. (1921). A treatise on probability, London, Macmillan.
  23. Keynes J.M. (1930). A treatise on money, London, Macmillan, vol. V, The pure theory of money, Cambridge University Press for the Royal Economic Society.
  24. Keynes J.M. (1936). The general theory of employment, interest and money, London, Macmillan.
  25. Kilpatrick A., Lawson A. (1980). On the nature of the industrial decline in the UK, Cambridge Journal of Economics, 4(1): 85-102.
  26. Kornai J. (1971). Anti-equilibrium: on economic system theory and the tasks of research, Amsterdam, North-Holland.
  27. Lachmann L.M. (1943). The role of expectations in economics as a social science, Economica, 10(37): 12-23.
  28. Lawson A. (1985). Uncertainty and economic analysis, Economic Journal, 95(380): 909-927.
  29. Leijonhufvud A. (1968). On keynesian economics and the economics of Keynes: a study in monetary theory, New York and London, Oxford University Press.
  30. Loasby B.J. (2001). Cognition, Imagination and Institutions in demand creation, Journal of Evolutionary Economics, 11(1): 7-21.
  31. Lloyd B.B. (1972). Perception and cognition, Harmondsworth, Penguin.
  32. Lucas R.E. (1972). Expectations and the neutrality of money, Journal of Economic Theory, 4(2). 102-124.
  33. Lucas R.E (1980). Methods and problems in business cycle theory, Journal of Money, Credit and Banking, 12(4): 696-715.
  34. Lucas R.E. (1983). Studies in business-cycle theory, Cambridge Mass., MIT Press. Lutz M.A, Lux K. (1979). The challenge of humanistic economics, Menlo Park, Ben-jamin-Cummings.
  35. Marshall A. (1949). Principles of economics, 8° ed., London, Macmillan. Maslow A. (1970). Motivation and personality, New York, Harper and Row.
  36. Menger C. (1871). Principles of economics, New York, New York University Press. Milgram S. (1974). Obedience to authority, London, Tavistock.
  37. Morselli A. (2020). Inequalities between liberal doctrine and Keynesian oriented conventional economics, Economic Thought, 65(3): 118-145.
  38. Morselli A. (2022). An institutionalist-conventionalist approach to the process of economic change, Economic Thought, 67(4): 411-428.
  39. Moggridge D.E. (1976). Keynes, London, Fontana Modern Masters Editors Frank Kermode.
  40. Nelson R.R. (1981). Research on productivity growth and productivity differences: dead ends and new departures, Journal of Economic Literature, 19(3): 10291064.
  41. O’Donnell R. (2019). General theorising and historical specificity: Hodgson on Keynes, Journal of Institutional Economics, 15(4): 715-731.
  42. Pateman C. (1970). Participation and democratic theory, Cambridge, Cambridge University Press.
  43. Peel D.A., Metcalfe J.S. (1979). Divergent expectations and the dynamic stability of some simple macro economic models, Economic Journal, 89(356): 789-798.
  44. Robinson L. (1971). Economic heresies, London, Macmillan.
  45. Rowse A.L. (1936). Mr Keynes and the labour movement, London, Macmillan. Rudner R.S. (1954). Philosophy and social science, Philosophy of Science, 21(2): 164-168.
  46. Rutherford M. (1984). Rational expectations and Keynesian uncertainty: a critique, Journal of Post Keynesian Economics, 6(3): 377-387.
  47. Say J.B. (1803). Traité d’économie politique, Paris, Deterville.
  48. Shackle G.L.S. (1974). Keynesian kaleidics, Edinburgh, Edinburg University Press. Shiller R.J. (1978). Rational expectations and the dynamic structure of macroeco-nomic models, Journal of Monetary Economics, 4(1): 1-44.
  49. Schotter A. (1981). The economic theory of social institutions, Cambridge, Cambridge University Press.
  50. Schotter A. (1985). Free market economics: a critical appraisal, New York, St. Martin’s Press.
  51. Simon H.A. (1959). Theories of decision-making in economic and behavioral science, American Economic Review, 49(1): 253-283.
  52. Sowell T. (1972). Say’s law, Princeton, NJ., Princeton University Press.
  53. Sutcliffe B. (1977). Keynesianism and the stabilisation of capitalist economies. In Green F. & P. Nore (eds.), Economics: An anti-text, London, Macmillan: 173.
  54. Sweezy P.M. (1946). John Maynard Keynes, Science and Society, 10(4): 398-405. Thompson G. (1982). The firma as a dispersed social agency, Economy and Society, 11(3): 233-250.
  55. Tobin J. (1980). Are new classical models plausible enough to guide policy?, Journal of Money, Credit and Banking, 12(4): 788-789.
  56. Visco I. (1984). Introduzione. In Visco I. (eds.), Le aspettative nell’analisi economica, Bologna, Il Mulino: 7-42.
  57. Weber M. (1947). The theory of social and economic organization, Oxford, Oxford University Press.
  58. Wible J.R. (1982). The rational expectations tautologies, Journal of Post Keynesian Economics, 52(2): 199-207.

Alessandro Morselli, The Modernity of Keynesian Thinking on Economic Policy from an Institutional Perspective in "HISTORY OF ECONOMIC THOUGHT AND POLICY" 2/2023, pp 67-86, DOI: 10.3280/SPE2023-002004