Mark Hayes - John Maynard Keynes

1. Chapter 2
2. Chapter 3

1. Chapter 1
2. Chapter 2
3. Chapter 3
4. Chapter 4
5. Chapter 6
6. Chapter 7
7. Chapter 8

Key Contemporary Thinkers Series includes:

• Jeremy Ahearne, Michel de Certeau
• Lee Braver, Heidegger
• John Burgess, Kripke
• Claire Colebrook, Agamben
• Jean-Pierre Couture, Sloterdijk
• Colin Davis, Levinas
• Oliver Davis, JacquesRancire
• Reidar Andreas Due, Deleuze
• Edward Fullbrook and Kate Fullbrook, Simone de Beauvoir
• Nigel Gibson, Fanon
• Graeme Gilloch, Siegfried Kracauer
• Lawrence Hamilton, Amartya Sen
• M. G. Hayes, John Maynard Keynes
• Christina Howells, Derrida
• Simon Jarvis, Adorno
• Rachel Jones, Irigaray
• Sarah Kay, iek
• S. K. Keltner, Kristeva
• Matthew H. Kramer, H.L.A. Hart
• Moya Lloyd, Judith Butler
• James McGilvray, Chomsky, 2nd edn
• Lois McNay, Foucault
• Marie-Eve Morin, Jean-Luc Nancy
• Timothy Murphy, Antonio Negri
• Daniel H. Neilson, Minsky
• Ed Pluth, Badiou
• John Preston, Feyerabend
• Severin Schroeder, Wittgenstein
• Susan Sellers, Hlne Cixous
• Anthony Paul Smith, Laruelle
• Dennis Smith, Zygmunt Bauman
• James Smith, Terry Eagleton
• James Williams, Lyotard
• Christopher Zurn, Axel Honneth

The Art of Choosing the Right Model

M. G. Hayes

polity

Copyright Mark G. Hayes 2020

The right of Mark G. Hayes to be identified as Author of this Work has been asserted in accordance with the UK Copyright, Designs and Patents Act 1988.

First published in 2020 by Polity Press

Polity Press

65 Bridge Street

Cambridge CB2 1UR, UK

Polity Press

101 Station Landing

Suite 300

Medford, MA 02155, USA

All rights reserved. Except for the quotation of short passages for the purpose of criticism and review, no part of this publication may be reproduced, stored in a retrieval system or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher.

ISBN-13: 978-1-5095-2824-0

ISBN-13: 978-1-5095-2825-7 (pb)

A catalogue record for this book is available from the British Library.

Library of Congress Cataloging-in-Publication Data

Names: Hayes, Mark (Mark G.), author.

Title: John Maynard Keynes / Mark Hayes.

Description: Medford, MA : Polity, 2019. | Series: Key contemporary thinkers | Includes bibliographical references and index.

Identifiers: LCCN 2019014897 (print) | LCCN 2019981313 (ebook) | ISBN 9781509528240 (hardback) | ISBN 9781509528257 (pbk.) | ISBN 9781509528288 (ebook)

Subjects: LCSH: Keynesian economics. | Keynes, John Maynard, 1883-1946Political and social views.

Classification: LCC HB99.7 .H365 2019 (print) | LCC HB99.7 (ebook) | DDC 330.15/6dc23

LC record available at https://lccn.loc.gov/2019014897

LC ebook record available at https://lccn.loc.gov/2019981313

Typeset in 10.5 on 12 pt Palatino by Toppan Best-set Premedia Limited

Printed and bound in the UK by CPI Group (UK) Ltd, Croydon

The publisher has used its best endeavours to ensure that the URLs for external websites referred to in this book are correct and active at the time of going to press. However, the publisher has no responsibility for the websites and can make no guarantee that a site will remain live or that the content is or will remain appropriate.

Every effort has been made to trace all copyright holders, but if any have been overlooked the publisher will be pleased to include any necessary credits in any subsequent reprint or edition.

For further information on Polity, visit our website:

politybooks.com

1. Diminishing returns in terms of average product of labour
2. Diminishing returns in terms of marginal product of labour
3. Diminishing returns in terms of marginal net product of capital
4. The distribution of income in accordance with marginal productivity
5. The time structure of income
6. Stock adjustment and the multiplier

1. Causation in the classical model
2. Causation in Keynes's general model
3. The demand for labour on one farm
4. The total demand for and supply of labour: The classical labour market
5. Classical unemployment
6. Investment demand
7. Investment demand at 10% interest
8. Investment demand at 30% interest
9. The balance between saving and investment: The classical capital market
10. The determination of rent: The market for land
11. The neoclassical labour market
12. The neoclassical capital market
13. The point of effective demand: The Z diagram
14. Effective demand and the multiplier
15. The multiplier and the Z diagram
16. The ISLM diagram
17. The ISLM diagram and crowding out
18. The United Kingdom's real exchange rate and current account
19. The United Kingdom's real exchange rate against the United States in Keynes's A Tract on Monetary Reform
20. World trade and UK income growth
21. World trade and US income growth
22. Sterling/dollar exchange rate, 18832015
23. UK growth of income, exports and income per head
24. G17 growth of income, exports and income per head
25. UK unemployment, inflation and interest rates
26. G17 unemployment, inflation and interest rates
27. US growth of income, exports and income per head
28. US unemployment, inflation and interest rates
29. UK public borrowing and investment
30. US public borrowing and investment
31. UK investment and public sector consumption
32. US investment and public sector consumption
33. Volatility in the UK data
34. Volatility in the US data
35. The rate of profit in the United Kingdom
36. UK investment and unemployment
37. US investment and unemployment
38. UK public borrowing and unemployment
39. US public borrowing and unemployment

I am most grateful to Roger Backhouse, Robert Bigg, Victoria Chick, Matteo Iannizzotto and Robert Skidelsky, together with three anonymous referees, for their comments on drafts of various parts of the manuscript, although this should not be taken as endorsement of my approach or opinions. Simon Perry read through the draft as a non-economist and provided valuable feedback on presentation. Any remaining errors, omissions or shortcomings are mine alone.

George Owers, Julia Davies and Manuela Tecusan at Polity have provided great support in the process of writing and production and helpful guidance on the interests of the intended readership. My thanks to them and all the production team.

I am grateful to the Royal Economic Society for permission to reproduce extracts from The Collected Writings of John Maynard Keynes, edited by Elizabeth Johnson and Donald Moggridge The Royal Economic Society 2013, published by Cambridge University Press.

This book sets out in plain English the essence and implications of the economic thought of John Maynard Keynes. It is aimed at undergraduate students in the social sciences, including economics, but without the commitment to more advanced mathematics found in economics textbooks. It should be accessible to a bright A-level student and to any fairly determined intelligent reader.