In this four-part INET “From the Director’s Chair” interview, INET Executive Director Robert Johnson talks with Journal of Post Keynesian Economics co-founder Paul Davidson about Davidson’s book The Keynes Solution: The Path to Global Economic Prosperity.
Davidson discusses Keynes’s oft-forgotten insights into the foundational assumptions of economics. Classical economists were treated as “Euclidians in a non-Euclidian world,” Davidson says. “When they saw parallel lines intersecting they rebuked them for intersecting.” Keynes saw that the problem with Euclidean economics was what he called uncertainty, meaning the idea that the future cannot be predicted from the past – an insight that modern economics too often ignores.
Davidson also explores Keynes's insights into the ergodic axiom by drawing upon Keynes's notion of uncertainty, what Keynes would say about the trouble in Europe, and how the concept of comparative advantage has fallen into gross misuse in today's economics.
Part 1: Keynes’s Forgotten Lessons
Part 2: The Trouble With the Ergodic Axiom
Part 3: What Goes Around Comes Around
Part 4: Legal Arbitrage Is Not Comparative Advantage