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Keynes in the Long Run
World Economics, December 2007
In the light of recent market volatility, this essay asks: is Keynes dead or alive? The broad conclusion is that while macroeconomic models are still used, very little survives of Keynes’s original theory. 'New Keynesians' have replaced his key concept of radical uncertainty by models of imperfect information and 'sticky prices'. These can be used to justify policy interventions, but they attract only a minority of economists. By contrast, Keynesian policy is much more alive, and most monetary authorities and Treasuries are prepared to counter potential output gaps. This is for political rather than for theoretical reasons. A worrying gap, therefore, exists between economic theory and economic policy. At the same time Keynes remains alive in unexpected places and ways: notably in developing countries (though he never addressed development issues) and through occasional, less theoretical writings like his
Economic Possibilities for Our Grandchildren
. His reflections on the link between economics and ethics are important for our day, and his actual life remains exemplary.
The IMF’s Uneasy Excursion into the Euro Zone
World Economics, September 2015
What is Britain worth to the next generation?
World Economics, June 2015
Macroeconomic Policy in Open Economies
World Economics, September 2014
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