The Continuing Relevance of Keynes's Philosophical Thinking: Reflexivity, Complexity, and Uncertainty
John Davis ()
No 2017-01, Working Papers and Research from Marquette University, Center for Global and Economic Studies and Department of Economics
This paper explains the continuing relevance of Keynesâ€™s philosophical thinking in terms of his anticipation of complexity thinking in economics. It argues that that reflexivity is a central feature of the philosophical foundations of complexity theory, and shows that Keynes employed an understanding of reflexivity in both his philosophical and economic thinking. This argument is first developed in terms of his moral science conception of economics and General Theory beauty contest analysis. The paper advances a causal model that distinguishes direct causal relationships and reflexive feedback channels, uses this to distinguish Sayâ€™s Law economics and Keynesâ€™s economics, and explains the economy as non-ergodic in these terms. Keynesâ€™s policy activism is explained as a complexity view of economic policy that works like self-fulfilling and self-defeating prophecies. The paper closes with a discussion of the ontological foundations of uncertainty in Keynesâ€™s thinking, and comments briefly on what a complexity-reflexivity framework implies regarding his thinking about time.
Keywords: Keynes; complexity; reflexivity; non-ergodic; policy activism; uncertainty; time (search for similar items in EconPapers)
JEL-codes: E12 B41 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-hme, nep-hpe, nep-mac and nep-pke
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Journal Article: The Continuing Relevance of Keynes's Philosophical Thinking: Reflexivity, Complexity and Uncertainty (2017)
Working Paper: The Continuing Relevance of Keynes's Philosophical Thinking: Reflexivity, Complexity, and Uncertainty (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:mrq:wpaper:2017-01
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