Post-Keynesianism: A New Approach to Economics

This paper is an attempt to isolate and analyze the major characteristics of post-Keynesian economics and to draw the policy implications that follow from it. In doing so I hope to show that post-Keynesian economics does in fact constitute a new approach to our understanding of economic phenomena. The ideas which are classified as post-Keynesian have, in fact, a long history. But, post-Keynesianism as a school of thought is a fairly recent development. It is really for this reason that its boundaries have not been precisely defined, if boundaries can ever be precisely defined (Dow, 1990). This could very well explain to some extent why post-Keynesian economists have not managed yet to be persuasive enough, although a number of other reasons suggest themselves. These additional reasons are that the economic issues post-Keynesians are concerned with are controversial; that there is substantial diversity in their theoretical premises; that there are ideological objections to post-Keynesianism which emanate from the orthodox character of the economics profession; and that post-Keynesians tend to define their program in a negative way as a reaction to neo-classical economics (Hamouda and Harcourt, 1988; Lavoie, 1989). Yet, there is another dimension to this argument in that there are different approaches that comprise post-Keynesian economics which not only differ in terms of method and economic features subsumed in their models but sometimes conflict with each other ? so much so that post-Keynesian methodol? ogy has been described as a horses for courses approach (Hamouda and Harcourt, 1988), as a Babylonian approach (Dow, 1985), which is tantamount to saying that it is a holistic rather than a reductionist or