Pkt
PktPost-Keynesian economic was formed and developed by economists such as Joan Robinson and Nicholas Kaldor who believed Keynesian economics was based on disequilibrium and uncertainty, and that challenges the general equilibrium assumptions of neo-classical theory. The main aim of post-Keynesian economics is to complete the unfinished Keynesian revolution.
Post-Keynesian economists fundamentally used ideas from Keynes and his concept of effective demand, Marxist economist Michael Kalecki to provide a critique of neo-classical economics beliefs and an alternative theory of markets. These economists again emphasise uncertainty, real time and actual market conditions. They also revived the classical link between macroeconomic theories of income distribution and economic growth using Keynesian analysis.
They emphasised that the role of financial markets and rejected the quantity theory of money, preferring effective demand as the major influence on income distribution.1
FOUNDATION�@OF�@POST�|KEYNESIAN�@ECONOMIC
MAJOR DEVELOPMENTS
In 1930s, Harrod�fs work on growth dynamics was the first development of post-Keynesian economic which distinct from Keynesian analysis. The prevailing theory in economics was static rather than dynamic. Harrods�f argued what was needed is a body of theory to explain what caused the observable movement of the economic system to change overtime. The Harrod-Domar formula, in which the growth rate as the dependent variable, is determined by the propensity to save and the incremental capital/output ratio.2
�eThe Accumulation of Capital�f by Robinson and �eReview of Economic studies�f by Kaldor were two key writings, which appeared in 1956. Both explained about the distinction between wages and profits in the work of Kalecki to explain an important aspect of growth dynamics, one inextricably linked to the distribution of income. 2 Such as an increase in the growth rate, because of the higher level of investment that it implied, would necessary be accompanied by a larger share of profits in national income, thus leaving workers relatively worth off. 2
In the 1960s, when American economy met a crisis which included inflation problem there was noting in the current neo-classical synthesis to suggest how the goal of full employment and price stability could be achieved conjointly, thus avoiding the need to make a Phillipsian choice between the two or even to explain how recession and inflation could occur simultaneously, as they could not solve through 1970s. 2
Characteristic of post-Keynesian Economic
There�@are a number of propositions which all post-Keynesians accept. Sawyer (1989) concurs with Davidson (1981) on the following three: 1. The economy is a historical process, 2. In a certain world, expectations have a significant and unavoidable impact on economic events and, 3. Institutions, economic and political, are of paramount importance in shaping economic events.4
The main characteristics of post-Keynesian economic can be divided into four parts.
The first of all, the existence of uncertainty, this is one of the key elements of post-Keynesian analysis. Because of the existence of uncertainty that the future is unknown and unknowable so that economic agents�f expectations can be...
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