From The Keynesian Revolution to the Klein-Goldberger Model: Klein and the Dynamization of Keynesian Theory

Michel De Vroey and Pierre Malgrange

No 2010019, LIDAM Discussion Papers IRES from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES)

Abstract: According to Klein, Keynes’s General Theory was crying out for empirical application. He set himself the task of implementing this extension. Our paper documents the different stages of his endeavor, focusing on his The Keynesian Revolution book, Journal of Political Economy article on aggregate demand theory, and his essay on the empirical foundations of Keynesian theory published in the Post-Keynesian Economics book edited by Kurihara. Klein’s claim is that his empirical model (the Klein-Goldberger model) vindicates Keynes’s theoretical insights, in particular the existence of involuntary unemployment. While praising Klein for having succeeded in making Keynesian theory empirical and dynamic, we argue that he paid a high price for this achievement. Klein and Goldberger’s model is less Keynesian than they claim. In particular, Klein’s claim that it validates the existence of involuntary unemployment does not stand up to close scrutiny.

Pages: 24
Date: 2010-03-31
New Economics Papers: this item is included in nep-hpe
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Citations: View citations in EconPapers (11)

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Journal Article: From The Keynesian Revolution to the Klein-Goldberger model: Klein and the dynamization of Keynesian theory (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:ctl:louvir:2010019

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