Abstract
Expectations have had a prominent role in macroeconomics ever since the publication of Keynes’s General Theory. In that book, the word ‘expectation’ appeared in the title of two chapters, and the concept was used throughout. Expectations were central to the determination of both the interest rate and the level of investment and the trade cycle in the longer run. This is most clearly illustrated in chapter 5, ‘Expectation as determining output and employment’, where Keynes identifies the importance of expectations in determining the level of employment: ‘To-day’s employment can be correctly described as being governed by to-day’s expectations taken in conjunction with to-day’s capital equipment’ (1936 [1973], p. 50).
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© 2016 Joseph Halevi, G. C. Harcourt, Peter Kriesler and J. W. Nevile
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Nevile, J.W., Kriesler, P. (2016). Expectations and Unemployment. In: Post-Keynesian Essays from Down Under Volume IV: Essays on Theory. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-137-47529-9_6
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DOI: https://doi.org/10.1057/978-1-137-47529-9_6
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