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Questions about Post-Keynesian economics

Short answers, pulled from the story.

What is Post-Keynesian economics?

Post-Keynesian economics is a heterodox school of economic thought built on John Maynard Keynes's The General Theory, developed further by economists including Michał Kalecki, Joan Robinson, Nicholas Kaldor, and Paul Davidson. It rejects the idea that a competitive market economy has a natural tendency toward full employment.

When did Post-Keynesian economics get its name?

The term was first used to describe a distinct school by Alfred Eichner and Jan Kregel in 1975. The Journal of Post Keynesian Economics was then founded in 1978 to give the label an academic home.

Who pioneered Modern Monetary Theory as a Post-Keynesian offshoot?

Modern Monetary Theory was independently pioneered by Warren Mosler, who modeled the currency itself as a public monopoly. The theory argues that coercive taxation, functioning as a kind of tax credit, is what drives a currency's value.

Why do Post-Keynesian economists reject the IS-LM model?

Post-Keynesian economists reject the IS-LM model developed by John Hicks because they argue endogenous bank lending matters more for setting interest rates than the money supply controlled by central banks. They also reject the idea that rigid or sticky prices and wages explain unemployment.

Where is Post-Keynesian economics taught today?

Post-Keynesian economics is taught at universities across the United Kingdom, the United States, the Netherlands, France, Canada, Germany, and Australia. Named examples include SOAS University of London, The New School in New York City, the University of Missouri-Kansas City, and the University of Newcastle in Australia.

How does Post-Keynesian economics explain how money is created?

Post-Keynesian economists argue that money supply responds to demand for bank credit, so a central bank cannot control the quantity of money and can only manage the interest rate through bank reserves. Basil J Moore's theory of horizontalism holds that reserves are supplied on demand at the bank rate, so loans cause deposits and deposits cause reserves, reversing the traditional money multiplier.