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Keynes's General Theory and Accumulation (Modern Cambridge Economics Series)

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If you ever tried to read Keynes's General Theory you know pretty well that some of Keynes's main ideas and some of his expositions of these same ideas are pretty confusing. It is well known by now that Keynes was in a hurry to get his book published and this is probably the reason why the GT is so hermetic. Asimakopulos goes a long way in explaining Keynes's ideas or, more precisely, some possible interpretations of these ideas in a simple and convincing manner. He also gives us two most wanted chapters with analysis of the works of two distinguished disciples of Keynes (i.e, Joan Robinson and Roy Harrod) and their attempts to extend his work to a dynamic framework. Of course, Asimakopulos' is not the only interpretation of Keynes'work. There is a whole "Keynes industry" in this world. It is, however, a short, advanced and neatly written piece of work and I consider it a must have especially for those who want a quick start on the topic.

The major conclusion that Asimakopulos(A)reaches in this book is that Keynes had no correctly defined and mathematically accurate representation of his theory of effective demand in the General Theory(GT;1936)that had a sound foundation in microeconomic theory.Thus,the GT must be rewritten and/or interpreted(reinterpreted)so as to correctly ground the intuitively correct ideas of Keynes on a sound foundation of microeconomic analysis.The foundation that A argues the GT should be based on is either the imperfectly competitive analysis of Richard Kahn and Joan Robinson or the more advanced version of the GT that Joan Robinson claimed that Michel Kalecki had written in explicitly mathematical terms three years before Keynes published his GT.The major criticism of A is that he completely overlooks the explicit mathematical model constructed by Keynes in chapters 20 and 21 of the GT.The model constructed by Keynes has an explicit microeconomic foundation based on a theory of the firm called pure competition.It is identical to the free competition assumption made by Pigou in 1933 in his book The Theory of Unemployment.This conclusion is obvious to any reader of the appendix to chapter 19 of the GT.Unfortunately,there is no evidence that A ever read Pigou's book or chapters 19,20,and 21 of the GT.A bases his entire assessment of Keynes's technical capabilities on a reading of pp.24-30 of chapter 3 of the GT alone.A's failure to read chapters 19,20,and 21 of the GT account for his mistaken belief that Keynes's analysis is unclear,ambiguous,confusing,incomplete,and problematic.