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The Keynesian Revolution (Keynesian studies)

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Klein's(K)The Keynesian Revolution is certainly worth having in your library from a history of economic thought perspective.However,Klein's mathematical model of his interpretation of what he thought Keynes was trying to say in the General Theory(GT) is not the model(s) that Keynes presented in the GT.Klein assumed that Keynes's only model had to have been the Y -multiplier model of actual aggregate demand contained in chapter 10 of the GT.Klein is only half right.The other half of Keynes's model is the D-Z model of chapters 19(appendix to chapter 19),20,and 21,which Keynes briefly introduced in chapter 3 on pp.24-30 and then analyzed in detail in the above mentioned chapters.Klein's model does not allow for the specification of the multiple equilibria in the commodity market which generates the constant disequilibrium in the labor market.Klein deals only with one equilibrium in the commodity market.He must assume imperfect competition on either/or the demand side/supply side of an aggregated commodity market in order to generate involuntary unemployment in the labor market.Klein's analysis is the same kind of analysis(though much more mathematically developed)that was used by Joan and Austin Robinson,Richard Kahn,and Michel Kalecki.None of these individuals was ever able to grasp the full nature of Keynes's analysis because they insisted in their misbelief that the theory of imperfect competition was a necessary condition for the existence of involuntary unemployment in the macro commodity market.Such an analysis was already implicit in A C Pigou's 1913 book on involuntary unemployment which,unfortunately,Pigou did not cover in his The Theory of Unemployment(TU) in 1933.In 1933,Pigou's goal was to establish that involuntary unemployment was not possible in a "freely competitive"(or purely competitive )Marshallian economy.Keynes proved otherwise.Once the Y-Multiplier model of chapter 10 is combined with the D-Z model of the theory of effective demand in chapters 20 and 21 of the GT(the set of all D=Z expected values defines the aggregate supply curve),the stage is set for Keynes to demonstrate to Pigou that his analysis in Part II,chapters 8-10,culminating in Pigou's proof on p.102 of TU,depends on an implicit and special assumption that the mpc +mpi is always equal to 1.Keynes generalized Pigou's result to incorporate the case where the mpc(the marginal propensity to spend on consumption goods)and the mpi(the marginal propensity to spend on investment goods)is less than 1.Keynes's general theory is that mpc+mpi<=1.A set of local optimal multiple equilibria is defined ,only one of which is also a global optimum.Expressed in the case of decreasing returns to labor ,a case which automatically satisfies the sufficient ,second order condition for an optimum,the necessary first order condition for an optimum is that w/p=mpl/(mpc+mpi),where w equals the money wage,p equals the price level,and mpl equals the marginal product of labor.Using the standard mathematical techniques available to and accepted by all mathematically trained economists in the early 1930's,Keynes showed that the most mathematically advanced exposition of neoclassical macroeconomic theory,as presented by Pigou,was a special case of his general theory.Unfortunately,Klein never covered the relevant parts of Pigou's argument.The result was that the chapters where Keynes generalized Pigou's analysis were overlooked by Klein.

despite the book was published more than fifty years, it is still the best introduction to keynes' general theory, now a classic.
the book received is in good condition and well packaged.

This is a rigorous introduction to the evolution of economic thinking in the time of John M. Keynes. Whether you approve of the General Theory or not, this provides exhaustive information about the pedigree of the theory. He also included much of the detailed mathematical proof in the appendix, proofs which Keynes did not furnish in The General Theory. But the real virtue of the book is that it provides a detailed guide to all of Keynes' economic writings. Keynes struggled mightily to reconcile what he saw in the European economy with his professional training, using great ingenuity to do so. Klein describes this struggle as if it were a great philosophical transformation, and indeed it was.

This book is, finally, of great polemical help to defenders of Keynes' General Theory against the modern current of market fundamentalism. The reason is that Keynes' process of discovery is documented against historical events--the world in which, in Keynes' words, we live. The other is that Klein exhaustively documents the vehement and absolutism of conservative economic thought of the day. So it must be understood that, whatever his flaws, Keynes did indeed make a revolutionary step in the history of economics.