Keynesian

1
Post-Keynesian Heterodoxy
1.1 Who are the post-Keynesians?
Post-Keynesian economics is only one of many heterodox schools of thought. Within this heterodox label, of which most members are clearly opposed to neoclassical economics, we find Marxists, Sraffians (also called the neo-Ricardians), neo-Structuralists (on development issues), Institutionalists, the French Regulation School,Humanistic or Social economists, Behaviourists, Schumpeterians (also called Evolutionists), Feminist economists, and more.
Heterodox economics is subjected to two opposite forces. First, heterodox schools suffer the general implosion of science and of economics in particular. Each heterodox approach has tended to emphasize particular questions in an effort to distinguish itself from otherapproaches. While heterodox schools are all rivals, they are nonetheless complementary, by targeting a particular aspect of the economy.
Second, there is also a counter-tendency toward unity among heterodox schools, perhaps as a result of their status of minorities in peril. Indeed, many heterodox scholars look for interactions and unity between the approaches. This is particularly true of Americanpost-Keynesians and neo-radicals (Marxists), who work in macroeconomics and monetary theory. In fact, one particular organization, the International Confederation of Associations for Pluralism in Economics (ICAPE) plays host to all heterodoxies as well as their institutions and journals. As such, the contours of the different approaches are to some degree arbitrary.

2. Introduction to Post-KeynesianEconomics

As their name indicates, post-Keynesians find their principal inspiration in the work of John Maynard Keynes, the famous British economist at the University of Cambridge. In fact, many claim that his 1936 book, The General Theory of Employment, Interest and Money, gave birth to macroeconomic theory.
And yet the book led to a number of conflicting interpretations. Post-Keynesians, forinstance, have an interpretation that is different from that of economists like Paul Samuelson and James Tobin, and the rest of the so-called 'neoclassical synthesis' Keynesians. It also is quite different from the interpretation given by the 'new Keynesians', such as Gregory Mankiw, Alan Blinder and Joseph Stiglitz (see Figure 1.1).
Modern post-Keynesians, however, do not limit themselves toKeynes. They are also inspired by the work of those who were close to Keynes at the time he wrote the General Theory at Cambridge - such as Roy Harrod and Joan Robinson - and by those who were instrumental in creating the Cambridge School in the 1950s and 1960s. Among these economists, we have Nicholas Kaldor, Michal Kalecki and Piero Sraffa. The views of post-Keynesians, like those of severalauthors of the French Regulation School (Boyer, 1990), are closely tied to the work of Institutionalists, especially those inspired by the ideas developed by Thorstein Veblen and John Kenneth Galbraith. In this sense, they continue the work started in 1936 by the Oxford Economists' Research Group. But, like Keynes, post- Keynesian economists are generally concerned with macroeconomic issues.

1.2 Thecharacteristics of heterodox economics

Before we begin describing the main features of post-Keynesian economics, it is important to discuss what makes heterodox economics different from neoclassical economics. Listing the defining features of neoclassical theory is not, however, an easy task. Indeed, what is the glue that unites those who study neo-Walrasian general equilibrium models withthose who use game theory or even those who are neoclassical synthesis Keynesians?
Neoclassical economists themselves often refer to the principle of constrained maximization as a unifying theme, and it is no doubt a central component of the approach. Until recently, we could even

4. Introduction to Post-Keynesian Economics

Box 1.1: Post-Keynesians in England

The Cambridge School...