Money, Uncertainty and Time Presentation prepared for the “Keynes Seminar”, Robinson College,...

Money, Uncertainty and Time

Presentation prepared for the “Keynes Seminar”, Robinson College, University of Cambridge, 24th November 2009

ByGiuseppe Fontana

Contents1 Introduction: Money, Uncertainty and Time

Part I: Keynes, the 'Classics' and the Modern Keynesian Dissent2 The Historical Development of Dissent in Keynesian Economics3 Methodology and Economic Theory in Keynes's General Theory

Part II: From Rationality to Unemployment and the Monetary Circuit4 A Two-Dimensional Theory of Probability and Knowledge 5 Uncertainty and Money

Part III: Understanding Endogenous Money6 Hicks as An Early Precursor of Endogenous Money Theory7 Horizontalist and Structuralist Analyses of Endogenous Money8 A General Theory of Endogenous Money

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Introduction

• Keynes and Keynesian Economics– Proposition 1: the Possibility of Involuntary

Unemployment– Proposition 2: the Principle of Effective Demand– Proposition 3: the Principle of Policy Effectiveness

• The Changing Nature of the Keynesian Dissent– First Principles: Money, Uncertainty and Time– Theory plus Methodology

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Keynes, the 'Classics' and the Modern Keynesian Dissent

• Chapter 2: The Historical Development of Dissent in Keynesian Economics– The Origins of Post Keynesian Economics– The Romantic Age: The Search for a Grand

Theoretical System– The Age of Uncertainty: The Search for an

Alternative Methodology

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Keynes, the 'Classics' and the Modern Keynesian Dissent

• Chapter 3: Methodology and Economic Theory in Keynes's General Theory– Keynes’s Method: Chapter 18 of the

General Theory– Keynes versus the ‘Classics’: Scope and

Method of Economics– Mr Keynes and the ‘Classics’ in Prospect

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From Rationality to Unemployment and the Monetary

Circuit• Chapter 4: A Two-Dimensional Theory of

Probability and Knowledge– Probability Theory and Forms of

Knowledge– On the Nature of Uncertainty– Paul Davidson and Non-ergodic / Monetary

Post Keynesians on Uncertainty

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From Rationality to Unemployment and the Monetary

Circuit• Chapter 5: Uncertainty and Money– Uncertainty2, Money, and Involuntary

Unemployment– Uncertainty1, Money, and the

Production Process

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Understanding Endogenous Money

• Chapter 6: Hicks as an Early Precursor of Endogenous Money Theory– “Monetary theory is in ‘history’ ”: An

Analytical and Historical Question– Single Period Theory vs. Continuation

Theory– Time and Method in Endogenous Money

Theory11

Understanding Endogenous Money

• Chapter 7: Horizontalist and Structuralist Analyses of Endogenous Money– The Horizontalist Analysis of Endogenous

Money:• Loans Create Deposits > Deposits Make Reserves

– The Structuralist Analysis of Endogenous Money• Liquidity preference of the household sector• Liquidity preference of the business sector• Liquidity preference of the commercial bank sector

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Understanding Endogenous Money• Chapter 8: A General Theory of

Endogenous Money– Controversial Issues• The market for monetary reserves• The credit market• The financial markets

– A Single Period-Continuation Interpretation of the Controversial Issues

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