Friday, January 6, 2012

Did Keynes replace expectations with animal spirits?

In my reading of John Hicks’ chapter on Ralph Hawtrey (in Economic Perspectives [Oxford, United Kingdom: Clarendon Press, 1977]), I found an interesting tidbit on Keynes’ supposed “radical subjectivism.” Writes Hicks,

When I reviewed the General Theory, the explicit introduction of expectations was one of the things which I praised; but I have since come to feel that what Keynes gave with one hand, he took away with the other. Expectations do appear in the General Theory, but (in the main) they appear as data; as autonomous influences that come in from outside, not as elements that are moulded in the course of the process that is being analysed.
JONATHAN M.F. CATALÁN
Don't make me read the tome to find out.

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