Work detail

Keynes and Keynesianism. Methodological Problems of Neo-classical Synthesis.

Author: Mgr. Jan Stráský
Year: 1998 - summer
Leaders: † prof. Ing. Milan Sojka CSc.
Work type: Economic Theory
Language: Czech
Pages: 88
Awards and prizes: M.A. with distinction from the Dean of the Faculty of Social Sciences for an excellent state-final examination performance and for an extraordinarily good masters diploma thesis.
Abstract: The thesis analyses methodological differences between the economic theory of J. M. Keynes and the mainstream interpretation of his theory that has been developed under the name of “neo-classical synthesis”. The main argument of the thesis claims that the methodological differences are the source of divergences between the Keynes’s theory and its later elaboration in Keynesian economics. First chapter reviews basic philosophical approaches to the methodology of science; especially Positivism and Popper’s method of deduction from hypotheses. It is argued that economics, as a social science, requires methodology that overcomes the strong opposition inherent in both inductive and deductive methods. Second chapter outlines the principles of Keynes’s methodology using his theory of investment and of behaviour under uncertainty. These two examples clearly demonstrate methodological differences that prevent a simple appropriation of Keynes’s theory in the neo-classical economic paradigm. Third chapter provides a historical overview of the evolution of Keynes’s ideas in the context of “neo-classical synthesis”; emphasis is put on the evolution of the IS-LM model from the original approach of the General Theory, which is interpreted as a typical, although not necessarily correct, attempt to incorporate Keynesian analysis into the framework of neo-classical economics. The thesis concludes with an overview of basic differences between Keynes’s theory and “neo-classical synthesis” and argues in favour of Post-Keynesianism as a more sensible way of pursuing the Keynes’s legacy.
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