Methodological, internal and ontological inconsistencies in the conventional micro-foundation of post-Keynesian theory

Christian Schoder

No 1518, Working Papers from New School for Social Research, Department of Economics

Abstract: By the aid of a simple but widely accepted model, the conventional micro-foundation of behavioral hypothesis postulated in post-Keynesian theory in the Kaleckian tradition is critically reviewed. Inconsistencies are identified along three dimensions: A methodological inconsistency arises from presenting macroeconomic arguments formally and microeconomic arguments verbally. An internal inconsistency prevails when the micro-considerations for different behavioral rules are mutually inconsistent. An ontological inconsistency arises since the postulated behavioral rules are invariant to endogenous changes in the micro-environment whereas the micro-considerations imply them to adjust endogenously. We arrive at two conclusions: First, re-visiting the issue of micro-foundation within the post-Keynesian framework may be a rewarding line of research. Second, the post-Keynesian research paradigm should be open to various forms of consistent micro-foundations as long as the economic mechanism characterized by the model are post-Keynesian.

Keywords: Post-Keynesian economics; micro-foundations; economic methodology; ontology (search for similar items in EconPapers)
JEL-codes: B41 B50 E12 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2015-08
New Economics Papers: this item is included in nep-hme, nep-hpe, nep-mac and nep-pke
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.economicpolicyresearch.org/econ/2015/NSSR_WP_182015.pdf First version, 2015 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:new:wpaper:1518

Access Statistics for this paper

More papers in Working Papers from New School for Social Research, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Mark Setterfield ().