| Research Abstract |
The principal objective of this research is to examine Keynes's development as an economic theoretician. Our main work is to analyze the processes of theory-building and re-building which constitute Keynes's intellectual journey from A Treatise on Moneyy (1930) to The General Theory of Employment, Interest and Money (1936). Attention has also be given to such topics as the historical development of various streams of economic theory, economic policy and social philosophy, as well as to British and international history, to the extent that these are germane to a proper understanding of Keynes's contribution to modern economics in the wider perspective. This research entitled A Study of Keynes's Economics - from A Treatise on Money to The General. Theory is composed of seventeen chapters (and four appendixes)-about 750 pages in terms of 80 columns*35 rows. (This research is to be published in the Sophia Economic Review (Nos. 1 and 2.1997 ; Nos. 1 and 2, 1998).
Our main results run as foll
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1. It is crucially important to pay attention to the question of how Keynes dealt with the relation between profits and the volume of output in the Treatise the importance of this relation, which we call the 'TM supply function', is stressed as expressing the dynamic mechanism. Keynes adhered to this function after the Treatise, in spite of many criticisms. Toward the end of 1932, however, he abandoned the 'TM supply function' though showing some hesitation, and put forward a new formula of a system of commodity markets which led up to the General Theory.
2. The Treatise belongs to the 'Wicksell Connection' which includes Myrdal, Lindahl, Mises, Hayek and others. We regard the Wicksell Connection as monetary economics which is against the neoclassical orthodoxy. The Treatise, however, included two types of argument - the 'Wicksellian-type theory' and 'Keynes's own theory'. Immediately after the Treatise, Keynes abandoned the Wicksellian-type theory, and strove to maintain or improve Keynes's own theory. We regard the Keynes after the Treatise as departing from the Wicksell Connection. The General Theory is completely independent of the Wicksell Connection.
3. The General Theory's revolutionary feature lies in showing, through a presentation of a clear-cut model, that the market economy, left to itself, would remain in underemployment equilibrium. The model shows how the volume of employment is determined based on the equilibrium analysis, contrary to the arguments of Post-Keynesians, the 'Disequilibrium Approach' Keynesians and others. It was not until 1933 that Keynes came to put forward a model of bow the volume of employment is determined. Thereafter Keynes took pains to elaborate his model, going on revising the concept of effective demand, the concept of marginal efficiency of capital. the theory of liquidity preference and others. We traced his efforts to such a meticulous degree. At the same time, however, we argue that in the General Theory Keynes sees the market economy as possessing two contrasting aspects : stability, certainty and simplicity on the one hand ; instability, uncertainty and complexity on the other. Less
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