Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/206675
Authors: 
Schettkat, Ronald
Year of Publication: 
2018
Series/Report no.: 
Schumpeter Discussion Papers 2018-007
Abstract: 
After the publication of Keynes' "General Theory," economics was frequently described as schizophrenia: (neo-) classical at the micro-level, but Keynesian at the macro-level. In actuality, Keynes' revolution was, to a substantial part, based on the behavioral micro-foundations of the world we live in, which has been dismissed as ad hocery, or simply ignored or reclassified in the neoclassical synthesis. Keynes' General Theory is truly general. It includes the full-employment equilibrium as a special case. In addition, its microeconomic foundations are broader than the extremely narrow behavioral assumption of the neoclassical model. Consequently, we argue that Keynes' microeconomics - although not fully worked out - is actually revolutionary. This may be difficult for (neo-) classical economists to accept, but it is strongly confirmed by the recent results in behavioral economics. Keynes' macroeconomics is the result of his microeconomics. Keynes' theory is a criticism of (neo-) classical economics, where he offers alternatives from micro to macro. It is truly a general theory, micro and macro.
Subjects: 
Keynes' economics
behavioral economics
microeconomics
macroeconomics
knowledge
information
uncertainty
animal spirits
JEL: 
A1
A13
B21
B22
B31
D01
D81
D84
D9
E12
E14
E7
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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