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Frederic Lee and Post-Keynesian Pricing Theory

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  • Marc Lavoie

Abstract

Frederic Lee has been a major contributor to post-Keynesian economics, mainly to its theory of pricing. This article summarizes his objections to the neoclassical view of the firm and pricing, as well as his view that changes in quantities, rather than in prices, provide the important information to firms. It also outlines Lee's views on competition, and examines the three pricing doctrines Lee carefully analyzed—markup pricing (associated with Kalecki), normal-cost pricing or full-cost pricing (associated with Andrews), and target-return or administered pricing (associated with Means). The article then discusses the relationship between Lee and three strands of post-Keynesianism: Kaleckian, Sraffian and Eichnerian pricing theories. It explains why Lee objected to some features of each of these. The article concludes by discussing why, towards the end of his life, Lee felt (mistakenly) that his ideas had been dismissed by heterodox economists.

Suggested Citation

  • Marc Lavoie, 2016. "Frederic Lee and Post-Keynesian Pricing Theory," Review of Political Economy, Taylor & Francis Journals, vol. 28(2), pages 169-186, April.
    • Handle: RePEc:taf:revpoe:v:28:y:2016:i:2:p:169-186
    DOI: 10.1080/09538259.2016.1149375
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    References listed on IDEAS

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    1. Paul Downward, 1999. "Pricing Theory in Post Keynesian Economics," Books, Edward Elgar Publishing, number 1457.
    2. Frederic Sterling Lee & Marc Lavoie, 2013. "In Defense of Post-Keynesian Economics and Heterodox Economics: Response to their Critics," Post-Print hal-01343662, HAL.
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    Cited by:

    1. Brendan Markey‐Towler, 2018. "Schumpeter's Price Theory," The Economic Record, The Economic Society of Australia, vol. 94(307), pages 512-514, December.

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