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M**Y
You need to understand calculus if you intend to write on the GT
Verdon's(V)book is the worst book that this reviewer has read that attempts to deal with Keynes's General Theory.I would therefore assign it 0 stars if such a rating were possible.V's book deals with the methodological question of whether Keynes's general theory of employment does in fact generalize the neoclassical theory.V's answer is that Keynes's theory and neoclassical theory are completely separate entities with completely different assumptions about the theoretical entities that each theory has created in order to explain economic behavior.Chapter 5 is titled "Keynes's Economics:What Kind of Revolution?".V's conclusion in this chapter is that Keynes deliberately mislead his readers into believing that he,like Einstein's generalization of Newtonian physics,was generalizing Classical and Neoclassical economics.V then lists what he claims are a number of myths that Keynes created.For instance,V claims that Keynes's microeconomic foundations are completely different from the microeconomic foundations of neoclassical economics.In chapter 7,V's discussion of Keynes's introduction of his D-Z model in chapter 3 of the GT on pp.24-30 is a mathematical mess.V relies on the error filled analysis of a 1983 book on Keynes written by Victoria Chick.Both Chick and V completely and totally ignore the the mathematical analysis and microfoundations supplied to the reader of the GT in chapters 19,20,21,and the appendix to chapter 19.The standard neoclassical theory is that equilibrium in the labor and commodity markets obtains if w/p=mpl,where mpl equals the marginal productivity of labor,w is the money wage,and p is the price level. Keynes's general theory of employment generalizes this to read as w/p=mpl/(mpc+mpi),where mpc is the marginal propensity to spend on consumption goods and mpi is the marginal propensity to spend on investment goods.Unless mpc+mpi = 1,some level of involuntary unemployment will always be present in the economy macroscopically; it will be mathematically and economically impossible for labor to cut its money wage in order to reduce unemployment,as recommended by the special neoclassical theory of employment.The author of this book failed in his goal because he lacked appropriate training in calculus.Anyone who attempts to read the GT without a calculus background will be unable to comprehend the technical analysis provided by Keynes in Part V of the GT.A reader, who is satisfied with knowing only Keynes's major result and doesn't care to go through the mathematical analysis of how Keynes derived this result in chapter 20 ,need only turn to pp.261-262 of the GT where Keynes spells it out :full employment requires that either the mpc=1 or that the mpc+mpi =1.The main reason Keynes gave for the failure of the private sector to generate a full employment level of output is that private decision making concerning how much to spend on investment goods is usually done under conditions of uncertainty and/or ignorance as opposed to risk.This explains the great volatility and instability in private sector spending[Ellsberg(2001)presents a model that can be used as a generalization of Keynes's rationale in chapter 7 of his decision theory book] on investment.Nowhere in this book or in Chick's book is this theoretical result mentioned or discussed.
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