Back to the future with Keynes

Lee Ohanian

Quarterly Review, 2008, issue Jul, No v. 32, No. 1, 10-16

Abstract: This article analyzes Keynes's \\"Economic Possibilities for our Grandchildren\\"- an essay presenting Keynes's views about economic growth into the 21st century - from the perspective of modern growth theory. I find that the implicit theoretical framework used by Keynes to form his expectations about the 21st-century world economy is remarkably close to modern growth models, featuring a stable steady-state growth path driven by technological progress. On the other hand, Keynes's forecast of employment in the 21st century is far off the mark, reflecting a mistaken view that the income elasticity of leisure is much higher than that of consumption.

Keywords: Economic history; National income (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedmqr:y:2008:i:jul:p:10-16:n:v.32no.1

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