1 Answer | Add Yours
Robert Skidelsky, the great biographer of Keynes, searches for clues in the original work of "the master". The book is an important contribution at a time of soul-searching, a must read even if one doesn't fully accept its conclusions.Keynes showed, however, that Say's Law isn't true, because in a monetary economy people can try to accumulate cash rather than real goods. when everyone is trying to accumulate cash at the same time, which produces a severe recession.
Keynesian economics is primarily a theory designed to explain how market economies can remain persistently depressed. Keynes suggested that the core of his insight lay in the acknowledgement that there is uncertainty in the world . Skidelsky declares that the traditional division between microeconomics and macroeconomics, which is based on whether one focuses on individual markets or on the overall economy, is all wrong; macroeconomics should be defined as the field that studies those areas of economic life in which irreducible uncertainty, uncertainty that cannot be tamed with statistics, dominates. Keynes was right – even about his own contribution. Surely it's possible to make the case for a less profound reconstruction of economics than Skidelsky advocates. The behavioural economists, who drop the assumption of perfect rationality but don't seem much concerned by the essential unknowability of the future, have done relatively well at making sense of this crisis; Robert Skidelsky is still the guide of choice.
We’ve answered 317,650 questions. We can answer yours, too.Ask a question