Effective Demand: Securing the Foundations

This paper is a contribution to a symposium mutually reviewing papers on Keynes's principle of effective demand as set out in The General Theory, by Allain (2009. Effective demand and short-term adjustments in the General Theory, Review of Political Economy, vol. 21, 1–22), Hartwig (2007. Keynes vs. the Post Keynesians on the principle of effective demand, European Journal of the History of Economic Thought, vol. 14, 725–39), and Hayes (2007. The point of effective demand, Review of Political Economy, 19 (1), 55–80). The purpose of the symposium was to address some key differences of interpretation that continue to undermine the reception of Keynes's central idea.