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Keynes vs. the Post Keynesians on the Principle of Effective Demand

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  • Jochen Hartwig

Abstract

The American Post Keynesians - those who attach importance to the capital 'P' and the absence of a hyphen between 'post' and 'Keynesian'- claim to be Keynes' most literal interpreters or the 'truest' Keynesians (Holt et al. 1998: 17). This paper compares the Post Keynesian interpretation of the Principle of Effective Demand, i.e. the D/Z-model, with Keynes' own presentation in chapter 3 of the General Theory- and finds substantial differences. A re-interpretation of the D/Z-model is offered that would bring it into line with chapter 3.

Suggested Citation

  • Jochen Hartwig, 2007. "Keynes vs. the Post Keynesians on the Principle of Effective Demand," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 14(4), pages 725-739.
    • Handle: RePEc:taf:eujhet:v:14:y:2007:i:4:p:725-739
    DOI: 10.1080/09672560701695554
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    References listed on IDEAS

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    1. Paul Davidson, 1994. "Post Keynesian Macroeconomic Theory," Books, Edward Elgar Publishing, number 124.
    2. Fabio Petri, 2004. "General Equilibrium, Capital and Macroeconomics," Books, Edward Elgar Publishing, number 3438.
    3. Paul Davidson, 1978. "Money and the Real World," Palgrave Macmillan Books, Palgrave Macmillan, edition 0, number 978-1-349-15865-2, March.
    4. Victoria Chick, 1983. "Macroeconomics after Keynes: A Reconsideration of the General Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262530457, April.
    5. Edward J. Amadeo, 1989. "Keynes’s Principle of Effective Demand," Books, Edward Elgar Publishing, number 11.
    6. Milgate, Murray, 1983. "Capital and Employment," Elsevier Monographs, Elsevier, edition 1, number 9780124962507 edited by Eatwell, John.
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    Citations

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    Cited by:

    1. Jochen Hartwig, 2014. "Relative Movements of Real Wages and Output," KOF Working papers 14-355, KOF Swiss Economic Institute, ETH Zurich.
    2. Jochen Hartwig, 2011. "Aggregate Demand and Aggregate Supply: Will the Real Keynes Please Stand Up?," Review of Political Economy, Taylor & Francis Journals, vol. 23(4), pages 613-618, October.
    3. M. G. Hayes, 2008. "Keynes's Z function: a reply to Hartwig and Brady," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 32(6), pages 1003-1003, November.
    4. M.G. Hayes, 2013. "Effective Demand: Securing the Foundations," Review of Political Economy, Taylor & Francis Journals, vol. 25(4), pages 661-671, October.
    5. Rotta, Tomás N., 2021. "Effective Demand and Prices of Production: An Evolutionary Approach," Structural Change and Economic Dynamics, Elsevier, vol. 58(C), pages 90-105.
    6. Olivier Allain & Jochen Hartwig & M.G. Hayes, 2013. "Introduction to the Symposium," Review of Political Economy, Taylor & Francis Journals, vol. 25(4), pages 650-652, October.
    7. M. G. Hayes, 2013. "The State of Short-term Expectation," Review of Political Economy, Taylor & Francis Journals, vol. 25(2), pages 205-224, April.
    8. repec:pke:wpaper:pkwp1211 is not listed on IDEAS
    9. Jesper Jespersen, 2012. "Keynes’s General Theory after 75 years: time to re-read and reflect," Chapters, in: Jesper Jespersen & Mogens Ove Madsen (ed.), Keynes’s General Theory for Today, chapter 8, pages 131-150, Edward Elgar Publishing.
    10. Hein, Eckhard, 2015. "The principle of effective demand: Marx, Kalecki, Keynes and beyond," IPE Working Papers 60/2015, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    11. Heller, Claudia, 2009. "Keynes’s slip of the pen: aggregate supply curve vs employment function," MPRA Paper 12837, University Library of Munich, Germany.
    12. Jochen Hartwig, 2009. "D and Z in ROPE," KOF Working papers 09-243, KOF Swiss Economic Institute, ETH Zurich.
    13. Rotta, Tomas, 2020. "Effective Demand and Prices of Production: An Evolutionary Approach," MPRA Paper 97910, University Library of Munich, Germany.

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