The aim of this paper is to assess how three seminal coordination failure models (Diamond ((1982)1991), Howitt (1985) and Roberts (1987) have fared against ‘Keynes’s programme’. The first part of the paper characterises Keyne’s programme as consisting of the following four objectives :...

This paper addresses the issue of why Keynesian economists have had such a hard time in giving the concept of involuntary unemployment a place in economic theory. Is the gradual demise of this concept a manifestation of some inner defect in economic theory or is it due to some intrinsic weakness...

The aim of this paper is to examine critically Lucas’ arguments against Keynes’s General Theory and in particular against Keynes’s concept of involuntary unemployment. It comprises two main parts. In the first, I question Lucas’s claim that Keynes betrayed the equilibrium discipline by...

Chapter 2 is one of the most important chapters in the General Theory. Not only does it set out Keynes’ disagreements with key elements of the classical model, it lays out his own model of the working of the labour market, which underlies the analysis in the remainder of the General Theory....

Keynes’ General Theory provides an interesting metaphor for asset markets: they are like newspaper competitions where contestants have to pick up the six prettiest faces from a hundred photographs, and the prize would go to one whose choice is closest to the average preferences. Keynes did not...

Now there is no part of our economic system which works so badly as our monetary and credit arrangements; none where the results of bad working are so disastrous socially; and none where it is easier to propose a scientific solution. (J. M. Keynes: Speech to the Liberal Party, December 1923, The...

In der Makroökonomik werden Liquiditätsfallen ohne Mikrofundierung als existent angenommen und die Japan-Krise hat Liquiditätsfallen wieder zum Diskussionsthema gemacht. Deshalb wird die Frage der Existenz von Liquiditätsfallen hier portfolio-theoretisch untersucht im Rahmen eines...

The sharp exchanges that Keynes had with some of his critics on the loanable funds theory made it harder to appreciate the degree to which his thought was continuous with the tradition of monetary analysis that emanates from Wicksell, of which Keynes's A Treatise on Money was a part. In the...

This paper revisits Keynes's liquidity preference theory as it evolved from the Treatise on Money to The General Theory and after, with a view of assessing the theory's ongoing relevance and applicability to issues of both monetary theory and policy. Contrary to the neoclassical "special case"...