The clash of the titans: Alternative visions underlying the general theory

Oezel H.

EKONOMICKY CASOPIS, cilt.55, sa.5, ss.459-475, 2007 (SSCI İndekslerine Giren Dergi) identifier identifier

  • Yayın Türü: Makale / Tam Makale
  • Cilt numarası: 55 Konu: 5
  • Basım Tarihi: 2007
  • Sayfa Sayıları: ss.459-475


It is argued that the analytical framework of Keynes' General Theory rests on two different and contradictory "prescientific visions" in the Schumpeterian sense. The dominant vision can be identified with its unwillingness to acknowledge the possibility that the market system can undergo periods of prolonged instability or even collapse due to its own functioning. The second, more latent, vision acknowledges the destabilizing consequences of the "coordination problem" in a long run framework. The clash between these visions prevents the book from tracing the long run effects of the coordination problem, due to instabilities introduced by money and investment. This clash causes the book to be confined within a comparative static analysis instead of a dynamic one.