The crisis in macro and the limitations of the economics of Keynes – or why the master will not return unless his General Theory is dressed up in neo-modern clothes

Togati, Teodoro Dario

doi:10.4337/9781781009529.00011

Cited by 3 publications

(2 citation statements)

References 6 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…First of all, the Einsteinian perspective helps us to understand that the GT is a product of Modernism-an extraordinary period which sees many contemporary revolutions and projects of "general theory" in several fields, from art to physics-involving a sharp departure from XIX century approaches (see also Togati, 2012;2018;2020).…”

Section: Postulatesmentioning

confidence: 99%

On the “Generality” of the General Theory. Or Why Keynes Lost His Battle and What to Do to Re-win It Again

Togati¹

2020

CBR

View full text Add to dashboard Cite

The paper emphasizes the true "generality" of the General Theory (GT) in the face of the dominant view, according to which Keynes's theory is captured by "Keynesian outcomes" in axiomatic general equilibrium models due to market imperfections. However, it argues that the advocates of generality must make a serious effort to re-conceptualize the GT in a very broad perspective. One must understand both its limitations and why the generality debate after the GT has failed to reconsider it in a proper way and what to do to restore Keynes's generality claim in the present context. This paper's contribution is twofold. The first is to make a distinction between three different dimensions of the generality issue and suggest that Keynes failed to grasp their full significance because he was facing the Marshallian orthodoxy, rather than general equilibrium. The second contribution is to suggest that one way to restore Keynes's generality claim is to stress that he belongs to an alternative paradigm that has several features in common with contemporary modernist revolution and with Einstein's relativity theory in particular.

show abstract

Section: Postulatesmentioning

confidence: 99%

On the “Generality” of the General Theory. Or Why Keynes Lost His Battle and What to Do to Re-win It Again

Togati¹

2020

CBR

View full text Add to dashboard Cite

show abstract

“…This is not the place to discuss the limitations of the General Theory at length. For a discussion, see e.g Togati, 2006Togati, , 2012. vi Also Akerlof and Shiller, 2009 pursue an endogenization of 'animal spirits' on the grounds of a broad or 'allencompassing' interpretation of this concept, one that includes both innate forces and conventional features.Unlike Dow who emphasizes the need to overcome dualistic distinctions in the analysis of agents' behaviour suchas that between cognition and sentiment, these authors stick to the standard view of rationality and regard 'animal spirits' as being entirely irrational.vii As I argue below, there is reason to believe that the term 'collective trust' is preferable to 'collective confidence' for the analysis of the stability of today's global capitalism.. viiiThe view of trust as a causal factor, rather than a consequence of economic change, is held for example bySheila Dow (2012) '...the functioning of the economy in general .., require(s) the presence of a key social convention: trust' (2012, p. 86)and Tony Lawson, who stresses that when, 'trust and confidence break down, we can have…(a) crisis'(Lawson, 2009, p. 768), such as the GR.…”

mentioning

confidence: 99%

How can we explain the persistence of the Great Recession? A balanced stability approach

Togati

2015

CAMECO

Self Cite

View full text Add to dashboard Cite

address for correspondence: dario.togati@unito.itThe Great Recession (GR) creates a stalemate in macroeconomics. On the one hand, standard approaches fail to account for its persistence in a credible way (mainly stress government failures as its deep causes, for example) due to their implicit assumption that the economy is internally stable. On the other, heterodox approaches fail to regain consensus. While often correctly stressing that the roots of the GR lie not only in developments within the financial sector but also in a lack of aggregate demand, they fail to devise an alternative method for showing why this problem has arisen in a systematic way. This paper fills the gap by proposing a new framework called the Balanced Stability Approach. Unlike standard macro, which takes stability for granted, it provides a balanced assessment of stability, considering both positive and problematic aspects of the so-called New Economy (NE), in a broad interdisciplinary perspective. On these grounds, the paper draws the conclusion that the low level of aggregate demand underlying the GR is rooted in a number of wider structural changes generated by the NE.2

show abstract

Ulysses’ journey home to Ithaca: a new metaphor for understanding the General Theory

Togati

2020

Cambridge Journal of Economics

View full text Add to dashboard Cite

This paper argues that in order to remedy the lack of alternative methods in current macroeconomics it is necessary to clarify the ontology of Keynes’s General Theory. One of the reasons why Keynes lost his generality battle is that he left many gaping holes in the ‘correct’ articulation of his research programme—especially in terms of the specification of hard-core ‘cosmological’ beliefs concerning stability, value and aggregate behaviour—yet to be filled by the post-Keynesian literature. In order to start filling the gaps, this paper proposes a new agenda called ‘The General Theory 4.0’ based on the new ‘Ulysses’ journey’ metaphor, which, it shows, is better than alternative ones, such as Farmer’s ‘windy boat’ and Akerlof and Shiller’s ‘rollercoaster’, for improving understanding of Keynes’s book.

show abstract

The crisis in macro and the limitations of the economics of Keynes – or why the master will not return unless his General Theory is dressed up in neo-modern clothes

Abstract: The crisis in macro and the limitations of the economics of Keynes. Or why the Master will not return unless his General Theory is dressed up in neo-modern clothes In J. Jespersen and M. Madsen (a cura di) Keynes's General Theory for Today, Elgar, 2012 pp. 40-59

Cited by 3 publications

References 6 publications

On the “Generality” of the General Theory. Or Why Keynes Lost His Battle and What to Do to Re-win It Again

On the “Generality” of the General Theory. Or Why Keynes Lost His Battle and What to Do to Re-win It Again

How can we explain the persistence of the Great Recession? A balanced stability approach

Ulysses’ journey home to Ithaca: a new metaphor for understanding the General Theory

Contact Info

Product

Resources

About