Essays on J.M. Keynes And...

About the Book

This book of 26 new essays on John Maynard Keynes shows that,first, Keynes had a fully operational approach to the estimation and calculation of both probabilities and expected values.However,this approach has been completely overlooked due to the overwhelming acceptance by economists,philosophers,psychologists,decision theorists,and mathematical social scientists of two error filled reviews of Keynes´s 1921 masterpiece,the A Treatise on Probability,written by Frank P Ramsey in 1922 and 1926,respectively.It is Ramsey who is responsible for making the false claim that by "nonnumerical probability" Keynes meant that numbers could not be used ,in general,to estimate probabilities.Second,it is established that,contrary to 99.99% of those economists who have written on the General Theory(1936;GT),chapter 3 presents only a rudimentory outline or guide or introduction to the formal analysis of his theory of effective demand which Keynes presented in chapters 10(actual or current aggregate demand),19,20, and 21(the expected aggregate supply function,Z,the expected aggregate demand function,D, and the expected aggregate supply curve,a locus of all expected D=Z intersections).It is then a simple task to obtain Keynes´s general theory of employment,given by the following optimality condition,assuming purely competitive markets:w/p=mpl/(mpc+mpi). (w/p)is the real wage,mpl is the marginal product of labor derived from an aggregate production function(GT,p.283;see also p.285),mpc is the marginal propensity to spend on consumption goods,and mpi is the marginal propensity to spend on investment goods.The classical and neoclassical special theory,that w/p=mpl,can occur only if mpc+mpi=1.If mpc+mpi<1 an unemployment equilibrium occurs(one of a number of multiple,stable equilibria) and some amount of involuntary unemployment is present in the macro economy.It will be impossible for labor,in the aggregate,to cut their money wage in order to reduce and/or eliminate this type of unemployment.The task of government(and international )monetary and fiscal policy is to make sure that the optimal amount of spending on private and public investment goods takes place so that mpc+mpi=1.Once this is accomplished,classical and neoclassical theory can become operational.

About the Author

Michael Emmett Brady received his Ph.D. degree in Economics from the University of California. He received his B.A. and M.A. degrees from California State University as well as completing all requirements for a B.A. in Mathematics. He has done graduate level work in mathematics