Investment, Profits and Employment in Kalecki & Keynes

Robert Dixon

No 990, Department of Economics - Working Papers Series from The University of Melbourne

Abstract: This paper sets out my response to the articles by Paul Davidson in the Journal of Post Keynesian Economics in 2000 and 2002 dealing with the (supposed) superiority of Keynes’s explanation of the “ultimate cause” of unemployment over that of Kalecki. I show that there are a number of serious errors in Davidson’s explanation of Kalecki’s theories. I also argue that we would have less of this sort of nonsense if ‘post keynesians’ like Davidson were to recognize that, for Keynes as for Kalecki, aggregate demand shocks are profit shocks. In the final section of the paper I explain why it is that I none-the-less agree most emphatically with Davidson when he says that Kalecki and Keynes had quite different ideas on the ‘causes’ or ‘origins’ of (involuntary) unemployment in a capitalist economy.

Pages: 23 pages
Date: 2007
New Economics Papers: this item is included in nep-hpe, nep-mac and nep-pke
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Persistent link: https://EconPapers.repec.org/RePEc:mlb:wpaper:990

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