Economic Policies: Three Contributions

Abstract

It is not my intention to undertake a theoretical discussion of Keynes’s analysis of wages and prices, but rather to offer some observations on this analysis from the point of view of the economic policy that has been introduced in the context of high and persistent inflation. Although post-Keynesian economists have primarily sought precise formulation and further development of the basic ‘Keynesian model’, it should not be forgotten that the greater part of Keynes’s work was motivated by the economic and social problems which dominated the inter-war period, and was most often oriented towards the formulation of economic policy proposals. One has only to read the Essays in Persuasion to be convinced of this. The General Theory, conceived and written during the ‘Great Slump’, formulates a combination of theoretical propositions intended to provide the foundation for an economic policy capable of assuring full employment: it is a theory worked out to support a particular economic policy. The ‘Ricardian vice’, so brilliantly analysed by Schumpeter, inevitably comes to mind.