Keynesian Economics: a Critical Introduction
275 Madison Avenue, Suite 2114
New York, NY 10016
Capitalism is fundamentally unstable. No one understood this better than John Maynard Keynes, whose seminal General Theory of Employment, Interest and Money, written in reaction to the Great Depression, single-handedly invented the field of macroeconomics. Yet, even as it was incorporated into standard economic theory, and became the dominant paradigm across the political spectrum, Keynes’ contribution was mischaracterized and deeply misunderstood. In discarding Keynesianism for neoliberalism, policy makers ignored, consciously or not, Keynes’ key insights into the limits of individual rationality and the role played by radical uncertainty in destabilizing financial markets and the capitalist system as a whole. What is Keynes’ “General Theory”? Why was it revived in the wake of the 2008 financial crisis? And to what extent can Keynesian economics offer possible alternatives to the neoliberal economic order?
In this course, we will trace Keynes’ intellectual journey to redefine the problems of economic theory through extracts from some of his early work including The Economic Consequences of the Peace (1919), A Treatise on Probability (1921), and Treatise on Money (1930). We will then turn to The General Theory to evaluate Keynes’ original contribution to economic theory to solve the question of how involuntary unemployment is made possible in a decentralized unplanned capitalist economy. We will outline Keynes’ framework to understand the processes involved in the determination of aggregate demand, consumption, investment, unemployment, and the role played by money in a modern economy. How can Keynes help us make sense of today’s new era of economic policy, what The Economist has recently dubbed “the world economy’s strange new rules?”
Course ScheduleWednesday, 6:30-9:30pm
April 08 — April 29, 2020