 From the Treatise of Probability to the General Theory: the concept of rationality in KeynesLuis Catão () Brazilian Journal of Political Economy, 1992, vol. 12, issue 1, 59-75 Abstract: The purpose of this paper is to re-assess the role of uncertainty in Keynes’s macroeconom-ics by exploring the concepts of probability, rational belief and rational action, as they ap-pear in the Treatise on Probability. Three main claims are then made. First, there exist sub-stantial links between the conception of human rationality in the Treatise on Probability and that in the General Theory. Secondly, Keynes attributes considerable importance to the ration-al elements involved in the process of investment decision and suggests that they normally lead to macroeconomic stability. Instability is thus explained by a specific institutional shock to an economy, which is already prone to crises due to the imperfect working of certain key markets. From this perspective, the post-Keynesian literature is misleading in blaming uncer-tainty for capitalist instability and unemployment. Thirdly, following Keynes’s hints, I sug-gest that an institutionalist research programme would provide a firm basis to model invest-ment behaviour under uncertainty in a more realistic way than usually done. JEL Classification: B3; B4. Keywords: Probability; rationality; Keynes (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ekm:repojs:v:12:y:1992:i:1:p:59-75:id:1403 Access Statistics for this article More articles in Brazilian Journal of Political Economy from Center of Political Economy |
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