Introduction to Keynesian Dynamics

Introduction to Keynesian Dynamics

Introduction to Keynesian Dynamics

Introduction to Keynesian Dynamics

Excerpt

This book is concerned with that part of economic theory which deals with the functioning of the economy as a dynamic whole, and in particular the temporal behaviour of national income, employment, and general prices. It is in the main a formal analysis of dynamic systems involving discrete and continuous changes, the sequence of cause-and-effect events, and the time paths of macro-variables and aggregative relationships in given socio-historical contexts. The macro-dynamic models of the 'building-block' type constructed for such an analysis are important, not so much for precise forecasting, but for the light they throw upon what is and what is not relevant for understanding economic change. They are also helpful in the selection of those strategic variables which are operationally most significant for the kind of society in which we actually live. Moreover, these dynamic models give us a deeper insight into the intricate equilibrium mechanism of an actual economy than do the macro-static models to which we have all grown accustomed.

The aim of this volume is to provide a coherent and compact study of macro-dynamic analysis in general and particularly the two outstanding 'post-Keynesian' developments in the field -- (1) dynamic theories of cyclical fluctuations and (2) secular growth analysis. With this aim in mind, I have endeavoured to lay greater stress on the laws of motion than on manipulative technique. Bibliographical footnotes have been included for further inquiries, appropriate diagrams designed for expository purposes, and institutional materials and policy statements inserted where they seemed essential to the clarity of perception.

Part I of this book provides a general base of reference for substantive analysis. Comparative-statics here is an indispens-

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