Keynes on Investment and the Business Cycle

Paul Burkett and Mark Wohar

Review of Radical Political Economics, 1987, vol. 19, issue 4, 39-54

Abstract: Keynes' analysis of the instability of investment and the businesss cycle emphasizes the effects of uncertainty and shifting expectations on investment decisions. Keynes' focus on historical/ qualitative change and on the essentially incalculable nature of expectations in a world of uncertainty distinguishes his analysis from the more determinate neoclassical world in which economic agents engage in an optimizing search for equilibrium subject to well-defined constraints. However, although Keynes demonstrates the possibility of crises in capitalist economy, his analysis of actual cyclical crisis tendencies in Chapter 22 of the General Theory suffers from an inadequate treatment of how the wage struggle and capitalist production relations influence the actual profitability of investment. In analyzing Keynes' business cycle theory it is crucial to clearly distinguish Keynes' short run, mathematical model of the factors which make crises possible from Keynes' historical/qualitative theory of the business cycle.

Date: 1987
References: Add references at CitEc
Citations:

Downloads: (external link)
http://rrp.sagepub.com/content/19/4/39.abstract (text/html)

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:sae:reorpe:v:19:y:1987:i:4:p:39-54

Access Statistics for this article

More articles in Review of Radical Political Economics from Union for Radical Political Economics
Bibliographic data for series maintained by SAGE Publications ().