Keynesian Behavioral Macroeconomics analyzes Keynes’s landmark contributions in behavioral economics and develops a new and fresh genre of macroeconomic analysis. It compels us to consider seriously the earlier-generation warnings about the impact of investors’ animal spirits and financiers’ liquidity-presence using cognitive-based and social psychology heuristics. Innovative in its subject matter, approach, theoretical development and policy prescriptions, this constructivist pluralist approach can contribute to important debates. This fresh look in macroeconomics can fruitfully be applied by macroeconomists, policymakers, and market participants to prevent effective demand shortages, stimulate the economy, preserve job creation, and impact redistribution, sustainability and social inclusion.
In this timely book, Theodore Koutsobinas develops a synthesis of Keynes’s macroeconomic theory with contemporary developments in behavioral macroeconomics to analyze urgent real-world challenges, and he proposes successful solutions for macroeconomic policy. This volume uniquely explains how Keynes’s magnificent, crucial, but long-forgotten dynamics can be analyzed on the basis of behavioral foundations to explain amplified global finance cycles, booms and busts, and macroeconomic instability with harmful effects on incomes and jobs.
1. Chapter 1. Introduction: the case for Keynesian behavioral macroeconomics - p. 3 2. Section II. Keynes, the traditional critique and the Cambridge (UK) Keynesians - p. 19 3. The critical edge of Keynes’s General Theory - p. 23 4. Chapter 3. The early traditional critiques of Keynes’s analysis - p. 35 5. Chapter 4. Money rates of interest, finance, and the missing portfolio equilibrium - p. 49 6. Chapter 5. Old debates, new theories? - p. 65 7. Section III. The development of behavioral economics of Keynes - p. 73 8. Chapter 6. Conventional expectations in Keynesian radical uncertainty - p. 77 9. Chapter 7. From conventional judgment to behavioral expectations - p. 89 10. Chapter 8. Keynes as the first behavioral economist - p. 101 11. Chapter 9. Keynes’s behavioral microfoundations - p. 115 12. Section IV. Monetary and financial aspects of Keynes’s macroeconomics - p. 123 13. Chapter 10. Multiple portfolio equilibria in Keynesian theorizing - p. 125 14. Portfolio allocation, liquidity preference, and the q-ratio - p. 143 15. Chapter 12. Beyond standard views: liquidity preference shifts in Keynes’s theory - p. 161 16. Chapter 13. From the workhorse IS-LR-MP model to modern behavioral Keynesianism - p. 183 17. Chapter 14. Modern Keynesian approaches - p. 201 18. Section V. The Keynesian reorientation of behavioral macroeconomics - p. 221 19. Chapter 15. Standard baseline models in behavioral macroeconomics - p. 223 20. Chapter 16. Keynesian behavioral macroeconomics - p. 241 21. Chapter 17. Comprehensive insights from a Keynesian perspective - p. 263 22. Section VI. The way ahead: further developments - p. 273 23. Chapter 18. Methodological and quantitative issues of behavioral expectations - p. 275 24. Chapter 19. Policy issues in the Keynesian behavioral framework - p. 291 25. Section VII. Extensions of the Keynesian behavioral framework - p. 301 26. Chapter 20. The relevance of sustainability - p. 305 27. Chapter 21. Global trends and the culture of radical uncertainty - p. 317 28. Chapter 22. Political economy and the impact of Keynesian behavioral foundations - p. 331 29. Chapter 23. Behavioral baseline models for the next generation - p. 347 30. Chapter 24. An afterthought - p. 357 31. Bibliography - p. 363 32. Appendix A. Glossary - p. 383 33. Appendix B. Comparative figures and tests from simulations - p. 389 34. Appendix C. Interactive simulations of the model - p. 403 35. Appendix D. The code of the model - p. 405 36. Removed: Endnotes - p. 411 37. Index - p. 431
Keynesian Behavioral Macroeconomics analyzes Keynes’s landmark contributions in behavioral economics and develops a new and fresh genre of macroeconomic analysis. It compels us to consider seriously the earlier-generation warnings about the impact of investors’ animal spirits and financiers’ liquidity-presence using cognitive-based and social psychology heuristics. Innovative in its subject matter, approach, theoretical development and policy prescriptions, this constructivist pluralist approach can contribute to important debates. This fresh look in macroeconomics can fruitfully be applied by macroeconomists, policymakers, and market participants to prevent effective demand shortages, stimulate the economy, preserve job creation, and impact redistribution, sustainability and social inclusion.
In this timely book, Theodore Koutsobinas develops a synthesis of Keynes’s macroeconomic theory with contemporary developments in behavioral macroeconomics to analyze urgent real-world challenges, and he proposes successful solutions for macroeconomic policy. This volume uniquely explains how Keynes’s magnificent, crucial, but long-forgotten dynamics can be analyzed on the basis of behavioral foundations to explain amplified global finance cycles, booms and busts, and macroeconomic instability with harmful effects on incomes and jobs.
1. Chapter 1. Introduction: the case for Keynesian behavioral macroeconomics - p. 3 2. Section II. Keynes, the traditional critique and the Cambridge (UK) Keynesians - p. 19 3. The critical edge of Keynes’s General Theory - p. 23 4. Chapter 3. The early traditional critiques of Keynes’s analysis - p. 35 5. Chapter 4. Money rates of interest, finance, and the missing portfolio equilibrium - p. 49 6. Chapter 5. Old debates, new theories? - p. 65 7. Section III. The development of behavioral economics of Keynes - p. 73 8. Chapter 6. Conventional expectations in Keynesian radical uncertainty - p. 77 9. Chapter 7. From conventional judgment to behavioral expectations - p. 89 10. Chapter 8. Keynes as the first behavioral economist - p. 101 11. Chapter 9. Keynes’s behavioral microfoundations - p. 115 12. Section IV. Monetary and financial aspects of Keynes’s macroeconomics - p. 123 13. Chapter 10. Multiple portfolio equilibria in Keynesian theorizing - p. 125 14. Portfolio allocation, liquidity preference, and the q-ratio - p. 143 15. Chapter 12. Beyond standard views: liquidity preference shifts in Keynes’s theory - p. 161 16. Chapter 13. From the workhorse IS-LR-MP model to modern behavioral Keynesianism - p. 183 17. Chapter 14. Modern Keynesian approaches - p. 201 18. Section V. The Keynesian reorientation of behavioral macroeconomics - p. 221 19. Chapter 15. Standard baseline models in behavioral macroeconomics - p. 223 20. Chapter 16. Keynesian behavioral macroeconomics - p. 241 21. Chapter 17. Comprehensive insights from a Keynesian perspective - p. 263 22. Section VI. The way ahead: further developments - p. 273 23. Chapter 18. Methodological and quantitative issues of behavioral expectations - p. 275 24. Chapter 19. Policy issues in the Keynesian behavioral framework - p. 291 25. Section VII. Extensions of the Keynesian behavioral framework - p. 301 26. Chapter 20. The relevance of sustainability - p. 305 27. Chapter 21. Global trends and the culture of radical uncertainty - p. 317 28. Chapter 22. Political economy and the impact of Keynesian behavioral foundations - p. 331 29. Chapter 23. Behavioral baseline models for the next generation - p. 347 30. Chapter 24. An afterthought - p. 357 31. Bibliography - p. 363 32. Appendix A. Glossary - p. 383 33. Appendix B. Comparative figures and tests from simulations - p. 389 34. Appendix C. Interactive simulations of the model - p. 403 35. Appendix D. The code of the model - p. 405 36. Removed: Endnotes - p. 411 37. Index - p. 431
