The Keynesian revolution:
This course examines the political economy of J. M. Keynes’ work and his innovative ideas about the behavior of the capitalist system as developed in his General Theory and other works.
Special reference is made to the principle of active demand, the concept of the multiplier, the role of money and uncertainty, Keynes’s views on the destabilizing role of speculation and the class of income earners, the existence of involuntary unemployment as a standard condition in a laissez-faire model of capitalism, and his proposals for reducing instability and reforming the global monetary system. Students are expected to come into contact with an approach to the operation of capitalism that breaks with the dominant orthodox tradition and that emphasizes the need for institutional interventions to ensure economic efficiency, full employment and social justice.
Among the issues to be analysed are:
- Expectations, production and employment.
- Theory of probability and uncertainty.
- Investment and marginal returns to capital.
- Theory of interest and money.
- Issues of economic policy and regulation of the financial system.