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Both Keynes's General Theory and orthodox economics seek to understand how competitive markets work, but they diverge sharply with respect to the nature and properties of the competitive equilibrium. The reason, as Keynes himself pointed out, is that the General Theory recognises that the future consequences of current decisions are fundamentally uncertain which, contra the orthodox view, radically affects decision-making and the functioning of markets.This book approaches macroeconomics on the basis of the General Theory, of which a new exposition is offered in the first part, purged of the grey areas that resulted from the context in which it was written, and of the considerable confusion generated for almost a century by the vain attempts of orthodox thinking to integrate such novel ideas in its deficient conceptual framework. The second part aims at extending the conceptual framework to the open economy and considering how uncertainty affects international linkages. The third part proposes an integrated conceptual and formal framework for analysing how changes in the national and international context, including macroeconomic policies, affect an economy.This new examination of General Theory is a major addition to the literature on Keynes, macroeconomics, economic theory and the history of economic thought.
List of contents
General Introduction Preliminary Chapter. Rational Behaviour and Animal Spirits in Face of Uncertainty Part I. Shifting Equilibrium Theory 1. Money, Finance and Interest with Subjective Valuation of Assets 2. Revisited Aggregate Supply and Demand Analysis and Income Determination 3. Underemployment Equilibrium with Flexible Wages and Prices 4. Equilibrium in Motion, Inflation and Growth 5. Macroeconomic Policy Implications Part II. International Linkages 6. International Trade and Finance in National Accounting 7. Exchange Rate, International Trade and Capital Flows 8. Balance of Payments Adjustment and Crises 9. International Equilibrium 10. Issues on Current Account Imbalances and Foreign Indebtedness Part III. Macroeconomic Analysis and Policy in an Open Economy 11. Extending the Analytical Framework 12. Macroeconomic Behaviour of a "Small" Open Economy 13. Supply and Demand Policy Analysis in a "Small" Open Economy 14. Macroeconomic Analysis and Policy in Interdependent Countries 15. International Monetary Cooperation and Macroeconomic Policy Coordination
