Fifteen years after the Global Financial Crisis: Recessions and Business Cycles in the History of Economic Thought

40 years after Macroeconomics after Keynes, A Reconsideration of the General Theory (1983): On Victoria Chick’s reading of Keynes

Rivot Sylvie, Université de Haute-Alsace

“Subject dictates method” (Chick 1983, p. 15). 40 years after its publication, Victoria Chick’s Macroeconomics after Keynes (1983) has lost none of its relevance. Regarding first method, Chick pinpointed the few crucial points that one must keep in mind to understand Keynes’s General Theory: the importance of distinguishing between different time horizons (especially in the treatment of expectations); the necessity to rethink the notion of equilibrium as a state of rest instead of a point at which supply equals demand (disequilibrium meaning accordingly that expectations are disappointed); the definition of income in value terms (in contrast with the accounting approach) with again the role of expectations to distinguish income account from capital account. Next, regarding results Victoria Chick restated very clearly Keynes’s argument about involuntary unemployment as an equilibrium, which implies carefully considering the functioning of the labour market in a monetary economy. In her Macroeconomics after Keynes (1983) Victoria Chick devoted a special concern for the determination of interest, which implies focusing the attention on finance and liquidity in a banking system, a concern that permeates her own contributions to economic theory. From her understanding of the functioning of a monetary economy that she derived from Keynes, the end of Victoria Chick’s opus dated 1983 addressed eventually contemporary issues such as stagflation. It is noteworthy that such issues are tackled not only in terms of policy-making concerns but also as a restatement of the controversy between Keynes and the Monetarists, as a final proof of the long-standing relevance of Keynes’s General Theory.

Area: Eshet Conference

Keywords: Victoria Chick

Please Login in order to download this file