Post-keynesianism

The post-keynesianism is a Courant of economic thinking developed starting from the Années 1930 in England and with the the United States. It is currently especially present at the United States. It is presented in the form of a current nearest to the ideas of Keynes.

A rather heteroclite current

The post-keynésiens take again what there is of more radical at Keynes (the latter moved away more and more from neo-classic progressively from its life), namely radical uncertainty, the analysis circuitist, endogeneity of the currency… They thus should not be confused with the Néo-keynésien S, which are closer to the keynesianism of the synthesis.

There exist several schools known as post-keynésiennes - note that classification is more or less changing.

keynesianists of long period like Roy Forbes Harrod.
keynesianists of chapter XII like G.L.S. Schackle.
the macroeconomics kaleckienne which start from a synthesis between the Marxisme and keynesianism. It was initiated by work of Michal Kalecki.
the school of Cambridge or post-cambridgiens. One finds there economists famous like Nicholas Kaldor, Joan Robinson, Michal Kalecki, Piero Sraffa.
the school of the circuit with Frederic Poulon, Schmitt, Barrère, Lavoie, which gives to the last style the theories of the physiocrats. They are focused on the money circulation. They develop in parallel of the very critical reflections towards the Microéconomie.

Differences with the neo-classics

The post-keynésiens are a school of economy hétérodoxe which takes a radically opposite position with that of the neo-classic economy.

As a school hétérodoxe, the school post-keynésienne is different by proposing the following points:

a realistic epistemology and not instrumentalist. The assumptions posed by the post-keynésiens must correspond to reality, they do not have a simple predictive function.
an approach holist and nonindividualistic. Frederic Poulon claims for example the possibility of an autonomous macro-economy compared to micro-economics, and asserts a field of analysis and reflection suitable for the macro-economy - which is not summarized, however with a simple “national accounting”.
the abandonment of the assumptions of absolute, or even limited rationality.
the setting with the plane second of the problem of the scarcity in economy, and on the contrary the setting in the center of the analysis, the problems of production, reproduction, growth and circulation.
official interventionism is favoured compared to the open market.

Micro-economics post-keynésienne

The current post-keynésien rejects in a rather radical way the reasoning marginalists in economy. The post-keynésiens try to break with the traditional neo-classic approach, which is generally based on the functions of utility, with all the assumptions that the construction as of these curves implies.

Growth and investment at the post-keynésiens

Problems

The theory of the post-keynésiens extends to many fields and in particular in the conditions from a growth balanced in the long run. Problems: if one knows full employment today, which conditions do have to be joined together so that this situation remains in the long run? Which are the conditions of a growth balanced in the long run? The two principal theorists post-keynésiens who try to find an answer to this question are Harrod and Domar. They present a dynamic model keynésien and, in the Fifties, they always initiate an economic research program topicality.

The model of Domar

Double character of the investment

For Domar, the long-term investment has a double dimension: it intervenes at the same time on the conditions of the saving and the conditions of demand insofar as it is one of the two components of the effective request. But to this first base of the reasoning initiated by Keynes, Domar adds that the investment modifies simultaneously the conditions of the offer, i.e. the conditions of the production, and the conditions of demand. Indeed, the investment in goods of production makes it possible to increase production capacities of the companies. The model rests on this simple idea that the investment results at the same time in an increase in production capacities and an increase in effective demand. To that the multiplier effect is added of the investment: a flow of investment results with final in a flow of request (and thus of income) for an higher amount. The question of the balanced growth can then be reformulated as follows: which conditions have to be joined together so that the additional production capacities generated by the investment find opposite them a request for consumer goods of an equivalent amount?

The equilibrium condition

Terms of the model of Domar. One notes: ; I: the investment Net after depreciation, i.e. one year the additional flow of investment on the other. ; σ.I: the expression of the effectiveness of the investment in term of increase in production capacities on the long run. It is the increase in production capacities on the long run induced by the annual variation of production capacities (I), by supposing that any variation of I necessarily does not lead to an increase in production capacities. Indeed, only a share of the investments Nets leads to an increase in production capacities. Thus, one can say that σ.I also indicates the offer of long run.

the request for east long run indicates by ΔI/α with α = 1 - C, marginal propensity to save. It is the product of the annual variation of the investment Net by the simple multiplier keynésien (K = 1/1 - c).

However, the equalization of supply and demand of long run does not have anything automatic. σ.I = ΔI/α α .σ.I = ΔI α .σ = ΔI/I. Thus, in the long run the growth rate of the investment Net is given by α.σ. However, nothing guarantees that it will be thus, because the variables which intervene of with dimensions of supply and are not the same ones. Side of the request, which is concerned, it is the variation of the investment Net whereas side of the offer, it is the volume of the investment Net which is determining. α.σ is a combination of two variables which have nothing to do with the other side of equality ΔI/I. The model of Domar shows that it is not sufficient that the investment compensates for simply supply to support effective. It is necessary indeed to know a sustained high growth and balanced long run which the investment Net of today exceeds the offer of yesterday the investment Net must increase unceasingly and thus to increase production capacities ad infinitum.

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