"The General Theory of Employment, Interest and Money" J. M. Keynes: Background, Methodology and Specific Interpretations

Abstract

The paper was prepared for the 80-th anniversary of publishing of JohnMaynard Keynes' ``General Theory of Employment, Interest and Money{''}.It discusses the stages of the economist's life, the main books writtenprior to ``The General Theory ...{''}. Particular attention is devotedto the development issues of the monetary policy in the works of``Indian Currency and Finance{''}, ``A Tract on Monetary Reform{''} and``A Treatise on Money{''}. A special section is dedicated to theanalysis of Keynes' methodology, its logic and structure, influenced byJohn. E. Moore. The paper reveals the unity and the difference inapproaches of A. Marshall and John M. Keynes, and explores newcategories of behavioral economics and marginal analysis, whichestablished the success of ``General Theory of Employment, Interest andMoney{''}, shows the value of Keynes's theory for the furtherdevelopment of macroeconomics.Particular attention is paid to the popularization of Keynes's ideasfrom the initial interpretations of ``The General Theory ...{''} to theneoclassical synthesis and further to neo-Keynesianism andpost-Keynesianism. The paper studies the unity and the distinctionbetween Hicks' and American Keynesianism. Hicksian assumptions of asavings-investment function have determined the features of the IS-LMmodel. The contributions to the development of Keynesianism A. Hansenand P. A. Samuelson are also shown, as well as the history of the``Keynesian Cross{''}. A comparative analysis of the neoclassical andKeynesian models of general economic equilibrium is given and analyzesthe institutional reasons explaining differences between neoclassicaland Keynesian paradigms.A special section is devoted to the Keynesian theory of growth, showingunity and difference of R. Harrod and E. Domar models, along with theirimpact on the creation of Development Economics. Simplifiedunderstanding of Keynes's legacy has caused the emergence of unorthodoxKeynesianism. The paper focuses on the contributions of R. Clower and A.Leijonhufvud to grasping the role of uncertainty and expectations in theoriginal concepts of Keynes and his contributions to the study ofdisequilibrium economy. Finally, we investigate the contribution ofpost-Keynesians (J. V. Robinson, P. Sraffa and N. Kaldor), the rise andthe fall of the Phillips curve, as well as the criticism of theKeynesian doctrine given by the monetarists, adherents of supply-sideeconomics, new classical economics, the theory of rational expectationsand the public choice.