Keynesian Behavioral Macroeconomics analyzes Keynes’s landmark contributions in behavioral economics and develops a new and fresh genre of macroeconomic analysis. It compels us to consider seriously the earlier-generation warnings about the impact of investors’ animal spirits and financiers’ liquidity-presence using cognitive-based and social psychology heuristics. Innovative in its subject matter, approach, theoretical development and policy prescriptions, this constructivist pluralist approach can contribute to important debates. This fresh look in macroeconomics can fruitfully be applied by macroeconomists, policymakers, and market participants to prevent effective demand shortages, stimulate the economy, preserve job creation, and impact redistribution, sustainability and social inclusion.
In this timely book, Theodore Koutsobinas develops a synthesis of Keynes’s macroeconomic theory with contemporary developments in behavioral macroeconomics to analyze urgent real-world challenges, and he proposes successful solutions for macroeconomic policy. This volume uniquely explains how Keynes’s magnificent, crucial, but long-forgotten dynamics can be analyzed on the basis of behavioral foundations to explain amplified global finance cycles, booms and busts, and macroeconomic instability with harmful effects on incomes and jobs.
1. Introduction: The Case for Keynesian Behavioural Macroeconomics
Section 1: Keynes, the Neoclassical Response, and the Cambridge-UK Keynesian Tradition
2. Keynes and the General Theory
3. Alternative Lines in the Neoclassical Criticism
4. The Concept of Money Rate of Interest
5. Concluding Discussion: Old Debates, New Theories?
Section 2: The Development of Behavioural Economics of Keynes
6. Conventional Expectations
7. From Expectations to Economic Psychology
8. Keynes as the First Behavioural Economist
9. Concluding Discussion: Keynes’s Behavioural Micro-Economics
Section 3: Keynes’s Monetary and Financial Macroeconomics
10. Behavioural Macroeconomics and Portfolio Finance Equilibria
11. The Contributions of Tobin and Kahn: A Synthesis
12. Beyond the Standard View of Keynesian Macroeconomics
13. Towards a New View: The ISLRMP Framework
14. Concluding Discussion: Some Critical Keynesian Elements for Behavioral Macroeconomics
Section 4: Keynesian Behavioural Macroeconomics in Modern Theory
15. Standard Behavioral Macroeconomics: An Overview
16. Keynesian Behavioural Macroeconomics
17. Concluding Discussion: Towards a New Synthesis
Section 5: The Way Ahead for Behavioral Macroeconomics
18. Modern Keynesian Approaches
19. Modern and Future Quantitative Research
Section 6: Keynesian Behavioural Policies
20. The Relevance of Sustainability
21. The Impact of Global Trends
22. The Political Economy fo Keynesian Behavioral Macroeconomics
23. Concluding Discussion: Behavioral Macroeconomics for the Next Generation
24. Book Conclusions: An Afterthought Bibliography, Endnotes, Appendix
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