Via Ritchie I see that this is the claim, that JM Keynes is no longer taught at Cambridge University.
I drifted into such thoughts on a visit to Cambridge this week to hear a friend, Geoff Tily give a seminar on Keynes – to a very small group – at Robinson College. There I met a University of Cambridge Economics lecturer who told me that the University does not teach Keynesian economics. The reason for this is that students are not examined on Keynesian economics.
Bit of a surprise to be honest. But not that much of a surprise to find that it\’s complete bollocks.
You have to do macro to do economics at Cambridge (well, duh!).
Year 1
Part I provides an introduction to the subject: a common core of knowledge which can subsequently be extended. There are five compulsory papers:
- Microeconomics
- Macroeconomics
- Quantitative Methods
- Politics (political and sociological aspects of economics)
- British Economic History
Through these papers you cover topics such as supply and demand, the role of prices and markets, employment, inflation, the operation of financial institutions and monetary policy. The Quantitative Methods paper provides an introduction to the use of mathematical and statistical techniques in economics.
There ain\’t nowhere on the planet that\’s going to teach that without reference to Keynes.
Here\’s the reading list:
General Introduction
Dasgupta, P. Economics: A Very Short Introduction. Oxford University Press
Microeconomics and Macroeconomics
Begg, D K H, S Fischer and R Dornbusch, Economics (latest edition), McGraw-Hill
Greenaway, D and G K Shaw, Macroeconomics: Theory and Practice in the UK (latest edition), Blackwell
Heilbroner, R, The Worldly Philosophers (latest edition), Penguin
*Mankiw, N G, and M.P. Taylor, Macroeconomics (European edition), Freeman
?? Anyone seriously want to try and suggest that Dasgupta, Dornbusch or Mankiw don\’t include Keynesian economics in their textbooks? Anyone even bothered to look? First review on Amazon.com talks about deriving the IS LM which sounds pretty Keynesian to me.
Sheesh, why do people believe such stupid things when it only takes 10 minutes to check?
I am an economics student at Cambridge. To be fair it is true that the original works of Keynes are not taught: no-one has to read the General Theory if they don’t want to.
Keynesian Economics is taught in the sense of Hick’s IS/LM model or the New-Keynesian models of Taylor, Mankiw etc.
However, it should always be recognised that New-Keynesians abandoned many of the nuances of Keynes’ theory (animal spirits, the principle of money illusion etc) in the same way that free marketeers abandoned the nuances of the works of Smith and Hayek.
It is often said that Keynes, if he was alive today, wouldn’t have described himself as a Keynesian economist.
The five bits seem to be
1. Economics.
2. Pish.
3. Sums.
4. Bollocks.
5. Facts.
Oliver Latham: There is indeed much more in Keynes than is used today by the Neo-Keynesians. That is though mainly because what they leave behind is wrong. There is some of it though that could be usefully resurrected, such as his treatment of uncertainty. (Neo Keynesians don’t leave behind the illusion of money they recast the issue in terms of “islands”).
That said I do find it sad that many free marketeers leave behind the nuances of Hayek, as many of them do.
Current: The islands model was by Lucas, about as far away from a New Keynesian as it is possible to get!
Pigeon-holing aside, Lucas’s model is not one of ‘money illusion’ as agents rationally use all information available to them.
Keynes’ theory saw individuals using information irrationally: they resisted downwards nominal wage changes that left their real income unchanged because they inherently misunderstood the distinction between real and nominal income.
This misunderstanding of the economic system is distinct from misperceiving or being misinformed about economic realities and has been all but left behind by modern theorists.
Tim adds: Eh? I thought the downwards stickiness of nominal wages was simplyaccepted by everyone now?
“Current: The islands model was by Lucas, about as far away from a New Keynesian as it is possible to get!”
New Keynesians claim to incorporate this insight into their models. I don’t think they really do, but they are not unaware of it.
“Pigeon-holing aside, Lucas’s model is not one of ‘money illusion’ as agents rationally use all information available to them.”
Yes.
“Keynes’ theory saw individuals using information irrationally: they resisted downwards nominal wage changes that left their real income unchanged because they inherently misunderstood the distinction between real and nominal income.”
Possibly. Give me a cite.
“This misunderstanding of the economic system is distinct from misperceiving or being misinformed about economic realities and has been all but left behind by modern theorists.”
That’s a difficult question, I agree.
The problem is really one of those “What is rationality?” problems. If a person knew all the details they would surely see what their real income is compared to their nominal income. None of us see all those details though, so we have to rely on our previously acquired knowledge. We can’t call rationality the knowledge of some god, we can’t make it what Hayek called “French rationality”. What it must mean to be useful is what people can learn, what Hayek called “Scottish rationality”.
Not knowing the relationship between your real income and your nominal income is a matter for an individual. It is that individual misunderstanding of their own situation.
None of this means that people necessarily resist downward changes in wages because any misunderstanding. The more plausible reason is that they resist it because they can.
Much more important to have a gauge-invariant theory of economics.
Perhaps a far more interesting question is whether the Austrian school (von Mises, Menger, etc) get much of a look-in.
@AntiCitizenOne
Oh go on, please. I have a superficial understanding of gauge invariance as it applies to the original electro-magnetics and an even more tenuous grasp on its application to the maths of QED, QCD and Yang-Mills theory.
What on Earth do you mean by the term in the realm of economics?
DONALD TRUMP UND DEUTSCHE BANK-GELDAUTISM
Von Raivo Pommer
Der US-Investor Donald Trump hat die die Deutsche Bank und andere Institute wegen eines Wolkenkratzerprojekts verklagt. Er fordert drei Milliarden Dollar Schadenersatz, weil die Banken seiner Ansicht nach Vereinbarungen zur Finanzierung seines “Trump Tower“ in Chicago gebrochen hätten.
“Wir haben Klage eingereicht. Darin beschreiben wir das schlechte Benehmen der Deutschen Bank im Bezug auf den Trump Tower in Chicago. Wir sind sicher, dass sich das Gericht unsere Position unterstützen wird”, sagte Trumps Anwalt Steven Schlesinger am Montag. Ein Deutsche Bank-Sprecher wollte sich zunächst nicht zu der Klage
Das Wall Street Journal hatte am Freitag berichtet, Trump habe trotz der weltweiten Finanzkrise und austrocknender Kreditmärkte eine Verlängerung seiner Kredite für den Bau erwirken wollen.
Zu den Gebern des 640 Millionen Dollar schweren Kredits zählt dem Blatt zufolge neben der Deutschen Bank unter anderen eine Tochter von Merrill Lynch.
I just mean a theory that works at both macros and micro levels.
i.e. Money = Time.
Okay – I’d call that “scale independent” – but :). I can cope with that. I just hate having to apply the matrix calculus necessary for proper vector analysis when I’m not being paid for it.
Economics is too simple to need calculus.
Have you guys read Garrison, he wrote a book about this:
http://www.amazon.com/Time-Money-Macroeconomics-Capital-Structure/dp/0415771226