[7] Keynes here most likely borrowed Einsteins distinction between the special and general theory of relativity. See also Skidelsky (1992:487).
[8] Though see Hicks (1983:374).
[9] Remarkably, also the JEL codes have ‘Keynesian’ next to ‘neoclassical’.
[10] Vide Keynes’s very definition of ‘effective demand’: what businesses expect to sell and thus are willing to currently produce, after taking account of already available stocks. ‘Effective demand’ thus is another word for ‘production’. Key Keynesian is seeing production as an expectational variable.
[11] It must be recalled that more economists in the early 1900s turned from comparative statics to dynamics. A key figure is Tinbergen, who used the calculus of variations in his thesis and who presented the first macro-economic model that the world has seen (see e.g. Boumans (1992) and Barten (1988)). It may be noted that Tinbergen’s first national model does not contain a monetary sector. In a sense understandable, since the model was for Holland, and Holland was on the gold standard at that time, and we know - with Mundell, who refers to Tinbergen’s ‘instrument argument’ - that monetary policy in that case is ineffective. Anyway, Tinbergen clearly was more of a ‘real business cycle’ analyst, while Keynes had the feeling for monetary issues. Keynes’s approach appeared more important, primarily since money is a generic policy instrument for the whole (world) economy.
[12] An illustrative example of the statics vs. dynamics issue, and of the problems that economists continue to have in making this distinction, is page 125 of Gregory Mankiw’s 1998 “Principles of economics” edition. Concerning the payroll tax and the distribution of its burden over firms and workers, and using a diagram of elastic demand and supply, he states: “This division of the tax burden between workers and firms does not depend on whether the government levies the tax on workers, levies the tax on firms, or divides the tax equally between the two groups.” Referring to a US Congress effort to allocate the burden he concludes: “This example shows that the most basic lesson of tax incidence is often overlooked in public debate.” Well, this conclusion is only valid for the static analysis, but in dynamics, take home pay is directly affected by regulations, while wage contracts are adjusted by quite different bargaining processes. The US Congress may well have taken a right decision for the medium run.
[13] I will take the position that definitions (and thus tautologies) can be very important too. I tend to think that Samuelson in fact would not disagree if the point would be formulated as such. Indeed, Samuelson has remained more of a theorist himself, and is less known for work on collecting data and estimation.
[14] Western economies suffer since the early 1970s from mass unemployment and the threat of inflation. This bad mix of bad ingredients is called “stagflation” for short. “Stagflation” in fact is a concatenation of “stagnation” and “inflation”. The word was coined around 1970 when national income growth stagnated and brought along unemployment. Since then growth has somewhat recovered, and stagflation has been redefined and now is properly understood as a bad ‘trade-off’ of both inflation and unemployment. See below.
[15] Note that Kennedy (1999) in his first six pages prominently refers to Keynes (1919).
[16] UN-WIDER Press Release “40 International Experts and Scholars Meet in Helsinki to Discuss the Wave of New Emergencies, 6 - 8 October 1996, at Hotel Marski”.