Keynes and the real world: Davidson, money, and uncertainty

Abstract

In this paper, we show that there are many similarities between the economics of Paul Davidson and the views expressed by the monetary circuit. This is not surprising because they both trace their roots to Keynes. Circuitists emphasize banks and uncertainty; Davidson places the focus on uncertainty, contracts, and money. We seek to show that both approaches are complementary on many levels and offer in fact simply different pieces of the same overall Post Keynesian puzzle. In the end, they both find their inspiration in Keynes, which is still relevant today, as exemplified in Davidson's new book, John Maynard Keynes.

Keywords:

• banks
• Paul Davidson
• John Maynard Keynes
• monetary circuit
• uncertainty