Post-keynesian economics

This article concentrates on the development of Post-Keynesian economics since 1950s, which is one of contemporary streams of keynesian thought. Post-Keynesian economics aims at building a new paradigma in economics on the bases of the original theories of J. M. Keynes and its perfecting by an alternative theory of distribution and price formation, and the theory of endogenous money supply. This work was begun by Italian-Cambridge school, and continues by their followers in the USA. Fundamental to this approach is the belief that we live in a monetary production economy where production takes time and uncertainty is pervasive. Economic events develop in historical time. Markets do not clear, and there is no automatic mechanism that assures a tendency towards full employment of labor and other economic resources over time. Man is considered to be a social being not an optimizing machine. As the monetary production economy is inherently unstable, most Post-Keynesians propose state interventionist policies to stabilize it. At macroecfonomic level they propose keynesian type fiscal and monetary policies supplemented by an incomes policy. Many Post-Keynesians propose supply-side microeconomic policies, as well.

Keywords: Post-Keynesian economics, critical realism, Italian-Cambridge school, antimarginalist revolution, mark-up pricing, endogenous money supply, tax-based incomes policy