Abstract
This paper uses a simulation model2 to describe the role which banks have to play when decisions by households and firms are taken under conditions of uncertainty, and when production, distribution and investment all take time. The first objective of the study is to supplement the narrative method used perforce by Keynes and his followers before the computer age. But it also adumbrates an alternative way of looking at the world — alternative, that is, to the neoclassical paradigm which is used by ‘IS/LM’ Keynesians, new Keynesians, monetarists of both kinds, quantity rationers and almost all writers of modern textbooks. Its title emulates Kaldor (1985) and its contents derive largely from Hicks (1989) and from Tobin’s work read seriatim.
I owe a special debt to George McCarthy who has helped and guided me throughout in all manner of ways. I am also indebted to Stephanie Clark, Anwar Shaikh and Malcolm Sawyer for extensive discussions; and to Robert Solow and Lance Taylor who both wrote careful critiques of an earlier draft.
This is a preview of subscription content, log in via an institution.
Buying options
Tax calculation will be finalised at checkout
Purchases are for personal use only
Learn about institutional subscriptionsPreview
Unable to display preview. Download preview PDF.
References
Arena, R. and Graziani, A. (eds) (1985) Production, circulation et monnaie (Paris: Presses Universitaires de France).
Backus, Brainard, Smith and Tobin (1980) ‘A Model of U.S. Financial and Non-Financial Economic Behaviour.’ Journal of Money, Credit and Banking 12.
Blinder, A.S. and R.M. Solow (1973) ‘Does Fiscal Policy Matter.’ Journal of Political Economy: 319–337.
Brainard, W.C. and J. Tobin (1968) ‘Pitfalls in Financial Modelling.’ American Economic Review 38: 98–154.
Christ, C. (1967) ‘A Short Run Aggregate Model of the Interdependence and Effects of Monetary and Fiscal Policy.’ American Economic Review 57, Papers and proceedings.
Godley, W. (1996a) ‘Money, Finance and National Income Determination: An Integrated Approach.’ Jerome Levy Institute Working Paper No. 167.
Godley, W. (1996b) ‘A Simple Model of the Whole World with Free Trade, Free Capital Movements and Floating Exchange Rates.’ Jerome Levy Institute mimeo.
Godley, W. and T.F. Cripps (1983) Macroeconomics (Fontana and OUP).
Hicks J.R. (1974) The Crisis in Keynesian Economics (Jahnsson Lectures).
Hicks J.R. (1989) A Market Theory of Money (Oxford: Clarendon Press).
Kaldor N. (1985) Economics without equilibrium (M.E. Sharpe).
Modigliani F. (1963) ‘The Monetary Mechanism and Its Interaction with Real Phenomena.’ Review of Economics and Statistics: 79–107.
Patinkin D. (1956) Money, Income and Prices (Harper & Rowe).
Robertson D. H. (1940) Essays in Money and Interest (Fontana).
Tobin J. (1969) ‘A General Equilibrium Approach to Monetary Theory.’ Journal of Money, Credit and Banking (February).
Tobin J. (1982) ‘Money and Finance in the Macroeconomic Process.’ Journal of Money, Credit and Banking 14.
Editor information
Editors and Affiliations
Copyright information
© 2012 Wynne Godley
About this chapter
Cite this chapter
Godley, W. (2012). Macroeconomics without Equilibrium or Disequilibrium. In: Lavoie, M., Zezza, G. (eds) The Stock-Flow Consistent Approach. Palgrave Macmillan, London. https://doi.org/10.1057/9780230353848_6
Download citation
DOI: https://doi.org/10.1057/9780230353848_6
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-33275-5
Online ISBN: 978-0-230-35384-8
eBook Packages: Palgrave Economics & Finance CollectionEconomics and Finance (R0)