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Article: The "fatal flaw" of classical economics: aspects of Keynes's evolution from 'The Treatise' to the 'General Theory.'
- Article from:
- Journal of Economic Issues
- Article date:
- September 1, 1994
- Author:
CopyrightCOPYRIGHT 1994 Association for Evolutionary Economics. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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The theme of this article is that Keynes's "revolution" in The General Theory of Employment, Interest and Money (GT) evolved out of earlier work, particularly his A 7realise on Money (TM). The continuity between these two works suggests that their central messages concerning the structure and function of the laissez-faire market system can, and should be, viewed as a whole.(1)
In this paper, I argue that the bridge linking the two works was their respective theories of liquidity preference. The argument will be that these two theories of the interest rate are distinct but complementary in that the theory of the TM is microanalytic in method and bears on the ...