Are we all Keynesians?

Abstract

This essay asks whether we are all becoming Keynesians again. It offers some thoughts about the impact of the financial crisis on macroeconomic theory and Keynesian theory, and on post-Keynesian theory in particular. It is argued that the crisis does have obvious effects on how Keynesianism is being perceived by decision makers, and that some effects are also observed on academia. However, there are forces within the economics profession and the population at large which are resistant to this second coming of the Keynesian revolution.

Animal Spirits and Trading Volume in International Financial Markets between 2002 and 2011

“…In financial markets, the authors analyze the efficiency of markets and the rationality of investors and attribute the dysfunction of financial markets to informational bias. However, in spite of the importance of its implications the rational expectation hypothesis, largely based on the efficient market hypothesis, fails to explain the excessive change in trading and returns in the major financial markets in developed and emerging countries (see, Lavoie, 2010). Numerous other authors attribute the excessive change in returns and trading volume in the major international markets to behavioral biases and investors' belief such as overconfidence (Daniel, Hirshleifer and Subrahmanyam, 1998), optimism (Haruvy, Stahl and Wilson, 1999;Weinstein, 1989;Otten, 1989) or pessimism (De Bondt and Thaler, 1987;Barberis Shleifer and Vishny, 1998).…”

Issues That Matter When Behavioral Finance Factors Drive the Largest Initial Public Offering in the Saudi Financial Market

“…In this regard, the incorporation of psychological indicators within financial models may help confirm the predictions of financial behavior theory when the behavior of investors is not completely rational over time since, in major cases, financial markets are affected by human psychology (Shiller, 2002). Therefore, the rationality hypothesis and efficient market hypothesis fail to explain market returns when the dysfunction in financial markets may be attributed to irrational behavior and human psychology (Lavoie, 2010). Actually, arriving at rationality might require two things in addition to using knowledge to enhance satisfaction: updating information and knowledge (Barberis and Thaler, 2003).…”

Die postkeynesianische Ökonomik in der Finanzethik des katholischen Sozialethikers Bernhard Emunds – Diskussion aus einer angebotsorientierten Perspektive

“…Der Postkeynesianismus ist nach der letzten großen und weltweiten Finanzkrise stärker wahrgenommen worden (Lavoie 2010). In Folge eines vermeintlichen Versagens der Mainstream-Ökonomik wurden alternative ökonomische Konzepte gesucht.…”