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1 of 4 people found the following review helpful:
3.0 out of 5 stars
PKers can't follow the analysis of involuntary unemployment., April 5, 2005
This book of collected essays is an excellent example of why the Post Keynesian,Institutionalist,and Cambridge Keynesian(neo Keynesian)schools of economics are practically on the brink of academic extinction.I will concentrate on essays 18,21 and 32 by Corry,Davidson,and Eatwell,respectively,but the criticisms made apply to practically all of the essays,which deal with a variety of issues ,such as the capital reswitching controversy,which dealt with a capital stock that was defined as a function of only one variable,a monotonically decreasing rate of interest,Keynes's General Theory and other aspects of his approach,the Cambridge Circus,the work of M Kalecki,the post keynesian school,and other assorted topics.The essays by Corry,Davidson and Eatwell deal specifically with the existence of involuntary unemployment and of an unemployment equilibrium,which should have been described as a set of multiple equilibria,only one of which is a full employment equilibrium.The general approach of each author is to argue that Keynes was right,after which some quotations from Keynes's works are given in support of that conclusion.Then it is acknowledged that Keynes did not supply any formal or mathematical analysis proving the existence of either involuntary unemployment or an unemployment equilibrium.This kind of approach can only be read in one way.Keynes failed and his "theories"are nothing more than a series of empty assertions that have no scientific merit.Contrary to the conclusions reached by the essayists in this book,Keynes provided a rigorous mathematical model,based on a series of elasticities that he constructed in chapters 20 and 21 of the General Theory,that generalized the classical and neoclassiacal theories.Keynes's major result is that w/p=mpl/(mpc+mpi),where w/p is the real wage,mpl is the marginal product of labor in the aggregate that is derived from an aggregate production function,and mpc and mpi are the marginal propensities to consume consumption goods and investment goods,respectively.If mpc+mpi <1,then you automatically obtain any one of a number of different multiple equilibria plus some level of involuntary unemployment.Only if the mpc+mpi=1 will the neoclassical theory become operational.Not a single author in this book demonstrates that he/she has any idea of the nature of Keynes's technical analysis.They show an understanding only of the literary exposition.
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