Sv: An Oxymoron

["petesand" <petesand@xxxxxxxxxxxx>]

Paul,

I will as soon as possible buy a copy of your book. Not so long ago, I must admit that I had only seen your name in references in books on interpretations of Keynes. Recently I have had a chance to read your "controversies in post-Keynesian  economics" and your contribution to the second edition of the "General Theory". I especially liked your chapter in the "second edition of the General theory". You seem to have some strong arguments against a flexible exchange rate regime!

At the university where I study and where I am also an instructor, most of the professors, if not all, are New Keynesians/monetarists (to me the difference does not seem to be that big between these schools). So what we teach is basically a New Keynesian approach. That is also what the exam is about - the ISLM model, the AD-AS model etc.
When I say a good New Keynesian text book, I think of one that is good at explaining these theories.

It is also my impression that some of the lecturers do not some to be aware of the fact that there are several interpretations of Keynes. What students are taught is that Keynes assumed a fixed price level and thus rely on the ISLM interpretation of Keynes. As anyone who has read the General Theory will realize the ISLM framework does not do justice to Keynes. How can e.g. chapter 12 on long-term expectations be put in to the ISLM-model?
A shifting IS-curve does not seem to do justice to concepts such as "animal spirits", "ignorance", "enterprise", "speculation", "The state of confidence" and "convention"!
Of course all New Keynesians also claim that in the long run inflation is a monetary phenomenon and we have returned safely to full employment.

In that respect they commit the same crime as the neo-classical economists did.

Or as Keynes wrote in the General Theory (p.34)

"It may well be that the classical theory represents the way in which we should like our economy to behave. But to assume that it actually does so is to assume our difficulties away."

Regards
Peter

Petesand@xxxxxxxxxxxx